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Guidelines for Concluding Contracts with Credit Card Affiliated Stores Formulated

The Ministry of Economy, Trade and Industry (METI) considers it important to show to stakeholders in the credit card industry, model contract terms in common used in concluding new contracts or revising the existing ones with credit card affiliated stores as well as guidelines for the industry as a reference in interpreting such existing contracts. To this end, METI has formulated Guidelines for Concluding Contracts with Credit Card Affiliated Stores.

1. Background

Aiming to develop environments for safe and secured utilization of credit cards in Japan, on December 9, 2016, Japan promulgated the Act for Partial Revision of the Installment Sales Act (Revised Installment Sales Act). Under this revised Act, credit card affiliated stores are required to take cyber-security measures, such as appropriate management of customers’ credit card numbers and other personal information, and prevention of unauthorized use of credit cards, while acquirers, e.g., credit card companies, are required to conduct investigation on such security measures taken by their affiliated stores and to take necessary measures based on the investigation results.

Moreover, on March 8, 2017, the Credit Transaction Security Council formulated and released the Action Plan 2017 for the Consolidation of Security Measures for Credit Card Transactions(hereinafter referred to as the “action plan”). Under this action plan, entities involved in the industry should steadily advance their efforts for the enforcement of the Revised Installment Sales Act.

Aiming at smooth enforcement of the Revised Installment Sales Act, METI established a Study Committee for Formulation of Guidelines (chair: Dr. Osamu Kasai, professor, Law School, Chuo University) consisting of experts and representing members of the related industrial associations to study ideal approaches to concluding contracts with credit card affiliated stores, and since then, METI has been holding discussions based on the report compiled by the committee. Against this backdrop, METI finally compiled discussion results into guidelines describing model approaches to concluding contracts with credit card affiliated stores, mainly focusing on three key points: [ⅰ]cyber-security measures that affiliated stores should take, [ⅱ]investigation conducted by acquirers on their affiliated and other stores, and [ⅲ]burden of loss as a result of damage caused by unauthorized use of credit cards at affiliated stores having no IC-compatible terminals.

2. Outline of the guidelines

Highlights of the guidelines are as follows:

  1. Purpose and position of the guidelines
  2. Model contract terms in commonI. General rules
    1. General rules
    2. Terms related to appropriate management of credit card numbers, etc.
    3. Terms related to prevention of unauthorized use of credit card numbers, etc.
    4. Terms for acquirers to satisfy requirements of investigations on their affiliated stores, etc.
    5. Terms for burden of loss as a result of damage caused by unauthorized use of credit cards

3. The guidelines that help stakeholders interpret the existing contracts with affiliated stores

METI expects parties involved in contracts with credit card affiliated stores, such as acquirers, providers of substitute services concerning settling transactions, and affiliated stores, to utilize the guidelines, thereby encouraging them to strive to advance efforts for addressing the Revised Installment Sales Act as well as efforts under the action plan.

Note:Please note that the guidelines may be revised according to the revision of the ordinances or basic policies of authorities.

Appendix

Release date

July 3, 2017

Division in Charge

Commerce Supervisory Division, Distribution and Industrial Safety Policy Group

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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