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METI to G.communication: Pick up the Phone

For a company that sells English lessons under the pretense that it will allow you to communicate with the world, G.communication has been very poor at communicating with its staff and customers. The Asahi shimbun reported yesterday that although g.communications set up a toll-free number for students to call, people are finding that it's almost impossible to get through.

In the immediate confusion of the bankruptcy, students have been trying to call the number in order to get some information about their lessons and contracts. METI and the Consumer Affairs Agency have learned that due to the lack of circuits for the phone number, students have been unable to get through. METI has since ordered G.communication to fix the problem.

Meanwhile the Consumer Affairs Agency has been collecting reports from consumer affairs centers across the nation and found that consultations about GEOS have largely been about inquiries about unused tuition fees and getting refunds, despite the fact that students can continue taking lessons at the nearest GEOS/G.communication school.

Also, G.communication, it seems, has been engaging in a little thievery of its own by apparently been having GEOS students sign away their rights to a refund (返還請求権放棄書) as a pre-condition for continuing their studies. In other words, GEOS/G.communication would prefer that students keep studying at the nearest GEOS/Nova schools and use up their lessons instead of asking for a refund.

Comment: I don't even know where to begin with the antics GEOS is pulling. The bankruptcy hasn't been a huge deal in the news like Nova's collapse was since refunds and being unable to book lessons haven't been the problem until now. Although G.communication has said GEOS students can keep on studying as usual, its failure to adequately inform its customers and GEOS engaging in some really slimy practices (isn't trying to have your customers sign away their rights to a refund outright fraud?) stand to make a bad situation into an ugly one, especially if getting a refund becomes a problem.

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Edit: Corrected fourth paragraph to reflect fact G.com, not GEOS, is asking students to sign a waiver.

Edit 4/26: I retract my comments about the waiver being fraudulent. It's not (see post entry above for FAQ that clarifies what g.education is doing). It's my fault for not reading more carefully. G.education has said that students do have a claim to a refund for the unused portion of lesson fees, but it's not clear how long the bankruptcy proceedings will take or if any money will be forthcoming.

Comments

Geos is not the company responsible for getting students to sign away their rights to a refund. It's all Gcomm!

Well, they're doing it, but why? Obviously to help out Geos. It's part of the deal.

Gcomm is only interested in making money out of this... not losing it by paying out cancellation fees to students who didn't even pay them anything to begin with.

Geos is not the company responsible for getting students to sign away their rights to a refund. It's all Gcomm!

YES! How dare it be construed that GEOS are the bad guys in all this!! They are the purveyors of justice, the essence of truth itself, the symbol of all that is right in this world.

I'd like to work for GEOS actually. I heard that GEOS really looks after its staff and students. Where can I send my resume? GEOS sounds great.

Maybe I misread what Shawn has posted but if G.Comm is offering to take up the "lost" lessons and offer them for free then I don't see what's wrong with the stipulation that there are no refunds.

Of course if customers are paying money then they have to offer refunds for any actual money paid to G.comm but for no money paid to G.comm is willing to offer them for free I don't see how a refund can be offered for something when a customer has paid no money for it.

As an outside observer I have found Shawn (of the dead?) 's postings to be right on the money - but disagree that students signing away their refund rights is fraudulent. The company GEOS has 750 million yen of debt! If you take a narrow hard-ball approach - that you insist on a refund what will happen? You join the list of unsecured creditors and get nothing.
A couple of things to remember. If it is true that Mizuo? (by memory) bank has loans to GEOS, you can be 1000% sure that any remaining cash - investments - buildings etc will go to them, not to students. Student refund cash will almost certainly total zero.
Every student that signs up is like an indemnity for GCOM. It also eliminates thousands of small creditors and just leaves the large jackals (Landlords and banks and the tax department) to try and rip into the tiny scraps that might remain. And chase after any Swiss bank accounts (good luck) This is exactly what the receiver, the banks, the regulators and possibly GEOS Directors all want. (Less messy creditors means less people firebombing Directors)
What you do not seem to have thought through - is: How is G-Com going to get paid? Where has the money come from? We can only speculate. Presumably there was some cash left, or the banks put some in as part of a deal? G-Com will do the lessons at low cost with the hope of picking up future business. I don't think these guys are the baddies here - at the end of the day the outcome without them would be that all the students lose their money. Signing up the indemnity seems like a very reasonable condition which G-Com would have imposed to avoid future legal challenges for a refund. Basic commercial prudence.
Or, as I say -go hard ball - students all demand their rights and get zilch. The students have paid for - say $100 value lessons and now get inconvenient $60 lessons. That is much much better than zero dollar lessons. Not a bad outcome at all in the circumstances
Same could be said for any teachers re-employed. A crap salary, but it will buy time to get out of the country and pass on the word that teaching English in Japan is now sub-economic. I am from Oceania and the word I will pass on is 'Don't bother teaching in Japan - post Japanese meltdown- not worth it - you can't save any more' (This is entirely based on information in LJ which I take to be quite a credible source if you sift a bit)

It may be a moot point, as the chances of students getting any refunds are minimal (we assume) and their ability to pursue criminal complaints is limited. However, there is no reason why GCom cannot offer these reduced cost packages ex gratia without taking on any liability for refunds. This would then leave students with the opportunity to pursue their legal options against GEOS if they wished. Since the main value of the students is in thier future custom there would be no reason to reduce GEOS liablility - unless of course it was a part of the deal.

Interesting thoughts on the waiver. Perhaps fraudulent is overstating the case, but customers should always have the option of a refund regardless of the fact that G.communication is offering lessons at a deep discount. It's obvious G.com is trying to cover its ass in case they are met with a flood of refund requests since they probably don't have a lot of cash on hand to deal with such a request. This pre-condition works in their favour, not the students'. The students have every right to demand their money back--their contract has changed and they may have to pay a bit more to keep studying, and they may have to travel a bit further to their new school on a different day at a different time--and should not sign away their rights just because it's a good thing for G.com.

Shawn
Let's Japan.org::Blog

Well, let's suppose that I have a drivers ed school called "Easy Rider Driving School". A student pays in advance to take a month's worth of lessons in my student driver Toyota. All goes well during the first two weeks. However, before the third week starts, I am critically injured when my own Toyota crashes after the accelerator gets stuck. Laid up in the hospital with a poor prognosis and little chance for recovery any time soon, I sell my business to Mr. Gee Willikers. Mr. Willikers owns a business called "Not So Easy Does It". The student does not like the look of Mr. Gee nor does he like his style of drivers education, and asks for a refund. Mr. Gee Willikers responds, "Sorry Mr. Student, but what refund would that be since I never received any money from you?" You don't think that Mr. Gee Willikers is within his rights?

You have to think of things from the standpoint of Gcomm. Let say you purchase an apartment building and become it's legal owner, but there are still some tenants who live in the building. Ideally, you'd like those tenants to stay in your apartment building and continue paying their rent. However, what would happen if a tenant wants to leave and requests their deposit back? What deposit? The deposit they paid the previous owner? But you didn't receive that money from them to begin with. Why should you be obliged to pay back a deposit which was never entrusted to you to begin with? This is not the best example, but I don't think enough people are thinking about things from any other perspective than 'the victim' here. Why should Gcomm feel obligated to refund money which was never paid to them? I think everyone should really be thankful a company was there to catch Geos' fall. It could be a lot worse, don't you think?

How can what G-comm is doing be considered "fraudulent"? Fraud involves deception. Are you saying that G-Comm is having students "sign away their rights to a refund", without letting the students know exactly what they're signing? If G-Comm is making it perfectly clear to the students what rights they are signing away, then there is no fraud.

14:38, 16:17 - yes, *of course* the new owner is responsible for giving any refunds the customers were entitled to under the old owner. Customers' contracts are part of what they bought, along with all the other assets. They bought them; they own them.
The fact that the company happened to have a different owner at the moment a customer handed over their money is a red herring. The new owner *did* receive the customer's money; it's in everything they bought (buildings, equipment, brand recognition (advertising), etc) came from customers' money. The fact that it's no longer in cash form is irrelevant.
The only legal factor that might let the company off the hook is the bankruptcy. Not the change in ownership.

I don't know exactly in Japan, but in America a bankrupt company comes under the control of a trustee.

The trustee can sell off parts of the company to satisfy debt, but ordinarily most creditors have to take some kind of haircut. The people who get the assets sold get them for the value they exchange. Rarely do they assume the debt, too. (One exception is when the U.S. Federal Deposit Insurance Corporation comes in and shuts down a bank.)

The GEOS students were creditors of GEOS if they paid in advance. Is anyone to believe that G.Comm agreed to rebate the money that GEOS said it didn't have anymore? Why would they do this? Not even in exchange for the customer list and possible future sales?

I assumed that G.Comm was ONLY willing to take over ongoing operations in anticipation of making continued sales. So they give free service for a certain number of months in the hope of obtaining a customer base.

It doesn't make sense that they would have agreed to accept the customers so that the customers could get refunds from G.Comm. Why would any company do that?

That's it. Basically, the students' money has disappeared. There's no refund money to give them. They've got no choice but to agree to not getting a refund, because they won't get one anyway.

Sure it sounds like they are SOL, but I think they students at least have a right to be vocal. The term of their contract did change. At the very least them doing this could warn future potential students to run fast and far from an eikaiwa that would ask a years tuition in advance. Especially since for the most part eikaiwa is basically a service, and not accredited educational institutions where they are working for a credit, degree or real credential.

http://search.japantimes.co.jp/cgi-bin/nn20100429a2.html

They have a shortage of teachers. Once all the GEOS teachers saw the new contract they ran for the hills.

To the teachers that signed the new contract. There is no job security. Some teachers stayed and signed the contract, and I know some walked even after signing the contract. There's no job security. G.comm will be downsizing schools that have too many teachers and not enough students so expect to teach more classes or have to travel to other schools. Head office is calling me and my friends to come back. My school is closed so if I return which school will I be at? Will I have to relocate? What about my visa?

Me and my friends have found new jobs already. More job security and no more stress wondering if I still have a job in 3 months. So if you are worried that you won't be able to find a job just get off your b-ckside and apply. If you are staying just to lie to your students that everything is alright I know my students are ready to get the hell out of there after they finish their contract and will not renew. You can still get some money back after the bankrupcy proceedings.

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