The top court on Tuesday dismissed an appeal by prominent English language school NOVA and ordered the group to return about 300,000 yen in prepaid tuition fees to a student who cancelled a contract.
NOVA’s tuition policy of selling classes on a point basis, with lessons becoming cheaper the more students buy, was at the center of the lawsuit.
The school had a policy of raising the price of lessons above the previously agreed fee should a student cancel a contract, thus reducing the amount it had to repay.
The Supreme Court ruled that NOVA should calculate the price of its classes on its initial rates.
The man, whose name is being withheld, paid 750,000 yen to NOVA in advance to buy points for 600 classes in 2001. The tuition fee per class was 1,200 yen.
He cancelled the contract in 2004 after finishing 386 classes. NOVA officials then said that the price of one class would come to 1,700 yen. The student claimed that NOVA should repay some 300,000 yen by calculating the price of the 386 classes at the rate set when he signed the contract.
The Supreme Court cited a law regulating commercial practices. The law provides that companies must not demand customers pay higher fees than previously agreed on if their clients cancel contracts midterm.
The National Consumer Affairs Center of Japan says it received some 7,600 complaints or inquiries about NOVA’s contract and cancellation policies from 1996 to March this year.