National / Crime & Legal

Police raid over 40 offices of Japan Life, bankrupt firm suspected of defrauding elderly customers

Kyodo

Police on Thursday conducted a raid on offices of Japan Life Co., a bankrupt company suspected of having engaged in a fraudulent rental business, for allegedly failing to inform a customer in 2017 about its excessive debts when concluding a contract, an investigative source said.

The police searched some 30 locations in Tokyo and 11 other prefectures in connection with the case. The company went under in March 2018, with debts estimated at ¥240.5 billion as of March 2017, according to a credit research firm.

The Tokyo-based company allegedly encouraged buyers, mainly elderly people, of its magnetic necklaces costing several million yen and other health items to become so-called rental owners.

Under the plan, the company is suspected of entering into a contract with customers, promising to pay them 6 percent of the purchase price of the goods as an annual rental fee if they lent their purchased products to others.

Thursday’s raids were conducted on suspicion the company made a contract with a Tokyo woman in her 60s in August 2017 while deliberately concealing the fact that it had excessive liabilities, according to the source.

The company had about 7,000 creditors in Japan and some 400 in Hong Kong. A number of damages suits have been filed across Japan against former executives and other senior officials of Japan Life.

In March last year, the Tokyo District Court decided to start bankruptcy proceedings against the company after the Consumer Affairs Agency ordered Japan Life to suspend part of its operations four times in the year to December 2017 over the dubious practice.