“I paid 50,000 yen, but they didn’t find me a guarantor.”
Among the new businesses spawned by the so-called “muen shakai” (indifferent or unsupporting society) are “hinkon” businesses appealing to people who subsist below the poverty line. These include Internet cafes with private cubicles where one can spend the night, and apartments that waive key money deposits.
Yet another growing business has been “hosho saabisu,” brokers that offer to introduce guarantors needed to lease an apartment or find work. Consumer claims against such operators, reports Takarajima (December), have been increasing rapidly.
The National Consumer Affairs Center of Japan reported the number of complaints in 2009 (the latest year for which figures are available) reached 209, nearly double the number of the preceding year.
Take the Tokyo man in his 30s who required a guarantor in order to obtain a contract as a regular company staff member.
“If my parents had still been living, I would have used them, but they passed away, and I couldn’t ask other relatives, as we don’t get along well,” the man explains. “Then I found the website of this guarantor service and since I was grasping at straws, I contacted them.”
The service accepted payment but could not come through with a guarantor. The man was unable to join the company, and the service refused to refund his money. Instead, they called him numerous times to demand additional “contract renewal” payments.
“They’re just taking advantage of weak people who lack guarantors,” the man says. “They’re no different from swindlers.”
A man in Tohoku had the annual contract for his factory job guaranteed by an uncle for 10 years. But although the uncle passed away, the company was unwilling to waive its requirement of a guarantor – despite the man’s unblemished 10-year work record.
A guarantor, a brokerage he found on the web told him, would cost 60,000 yen for six months, or 100,000 yen for a year. After the man sent the first payment, the service sent him his “guarantor’s” name and address, but no letter of guarantee bearing the man’s “hanko” (personal seal) arrived.
Takarajima’s reporter set out to trace the guarantor and investigate what happened. The “guarantor” turned out to be a man in his 50s in Gunma Prefecture, who told the magazine that he had provided his name and other personal data to the guarantor service two years ago, but immediately had second thoughts about the wisdom of such an arrangement. “I decided to back out before the deal went through,” he says.
But the cancellation was not enough to deter the service from using his name and address as bait to swindle a man in desperate need of a guarantor.
The guarantor service – which claimed on its website that it boasted 43,000 customers – was tracked down to a former dry cleaning shop located 40 minutes by car from Fukuoka Airport in Kyushu.
When confronted with the details of the Tohoku man’s woes, the proprietor of the service told the magazine, “When contracting our services, we never make a 100% assurance that we can provide a guarantor.” As for claims over the use of the man in Gunma without permission, the proprietor doggedly insisted “Such a thing could never happen.”
“Temp-help jobs and other types of irregular employment have been increasing,” says Keisuke Sakai, a attorney who has dealt with such cases. “Such workers move from one employer to the next, and they often face unstable income that inevitably requires them to move their residence, so more situations arise in which they require a guarantor. But for the same reasons, guarantors become increasingly difficult to find.
“These brokers are extremely malicious businesses out to exploit disadvantaged people,” Sakai adds.
As for those who agree to be guarantors, the risks may outweigh the advantages. During fiscal year 2009, a certain Mr C received 387,950 yen in payments for acting as a guarantor. Unfortunately, out of 10 people he guaranteed, four of them defaulted on rent payments; he was sued to make up for the shortfall.
The brokers, it seems, rake in all of the profits, while assuming none of the risks.
So why don’t government agencies take more decisive action to discourage such abuses? Despite increasing requirements for guarantors for everything from rental leases to private school and rest home admissions, the laws remain mired in a section of the civil code that went into force in the 29th year of Meiji—1896.