Job Discussion Forums

[Miyazaki]

NOVA punished for deceiving students and breaking other laws.

http://www.asahi.com/english/Herald-asahi/TKY200706130249.html

Ministry to order Nova to halt part of its operations
06/13/2007

THE ASAHI SHIMBUN


The industry ministry will order Nova Corp., the nation's largest
English language school operator, to suspend part of its operations
for six months as punishment for deceiving potential students and
committing other violations, sources said Wednesday.

Nova will be notified of the suspension order as early as Wednesday afternoon.

Nova will be banned from soliciting, accepting or finalizing new
contracts for long-term courses that last for over a year, the sources
said.

The suspension order will not affect those who have already signed up
for lessons, meaning that Nova's more than 400,000 students can
continue taking classes.

Still, the order could deal a serious blow to Nova's operations
because most of its contracts are for periods that exceed a year.

The Ministry of Economy, Trade and Industry concluded that Nova had
violated several clauses of the specified commercial transaction law,
including providing false explanations to get students to sign up for
lessons, the sources said.

It will be the first time a language school to be suspended from
business based on the law.

The company told potential students they would be able to book lessons
for the times of their choice, but some of those time slots were, in
fact, difficult to reserve, the sources said.

In addition, the ministry apparently concluded that Nova's refund
rules violated the law, which bans companies from unfairly refusing or
delaying refund payments, sources said.

Under Nova's system, students buy "points" in advance to pay for their
lessons. The larger number of points they buy in bulk, the smaller the
per-class fee.

But when students stopped midway through the course on grounds they
could not make reservations as smoothly as promised, Nova calculated
the points already used at a higher value, thereby slashing the refund
for the remaining points.

Nova said the value of the used points should be calculated as having
been bought in smaller lots.

The ministry also believes that Nova failed to comply with a
"cooling-off" system provided for in the specified commercial
transaction law.

Under this system, consumers can cancel a contract without conditions
if the cancellation is made within eight days from when the contract
was signed.

At Nova, potential students first register their name, address and
other data before finalizing their contracts. An official application
to the school is made several days later, after the details of the
contract are decided upon.

However, Nova told students who wanted to quit that they could not use
the cooling-off system, claiming that the day students registered
their data was the first day of the contract, the sources said.

Consumer centers nationwide have received more than 1,000 complaints
and queries regarding Nova annually.

In February, the ministry and the Tokyo metropolitan government
conducted on-site inspections at Nova's headquarters and several
branches to see if the company was complying with the specified
commercial transaction law.

The ministry has since been questioning related officials and
analyzing documents.

Many Nova students have filed lawsuits against the school at courts
across the nation, arguing that its refund rules were illegal.

In April, the Supreme Court ruled that Nova should calculate the
refunds based on "the value of the points at the time of purchase."

Following the ruling, the ministry revised its directives for the
specified commercial transaction law to make clear that it will not
allow refund systems similar to Nova's.(IHT/Asahi: June 13,2007)

[Nismo]

Justice.

Sucks for foreigners who will get cut, though.

[partialtone]

[yamanote senbei]

Nova is in serious trouble and might not even still be in business in September. The company lost 10 billion yen in the last year and only has 4 billion left, which isn't going allow them to stay in operation for very long, especially with this business suspension order in effect.

As one would expect, Nova's stock has taken a serious hit:
http://company.nikkei.co.jp/index.cfm?scode=4655

[codedals]

hahaha!!!!

I love it! Ah well, back to the resume and job boards I go...

I know everyone says Nova is shitty, and it probably is, but I was actually looking forwards to the MMC.

[JimDunlop2]

How many teachers does NOVA employ country-wide?

[Chris21]

Wow, that's big news! I'm not sure what effect halting new "long-term course" students might have, but at the very least, it'll exacerbate a difficult situation. At worst, it could knock them out of business.

I did a quick wikipedia check, and Nova apparently has 5,000 native English speakers working for them. Throwing 5,000 native speakers out of work is bound to have an effect throughout the industry... more competition for eikaiwa jobs? A better bottom-line for competing schools? Fewer foreigners in Japan?

I wonder what the fallout might be.

[JimDunlop2]

My prediction? (If they go belly-up, that is)... Short-term fallout would be pretty significant, but the vacuum would be rapidly filled in by the remaining 3 of the "Big 4" as well as some of the other, smaller eikaiwas that will see a sudden jump in business and a demand for more teachers.

I would suspect that if you worked for NOVA and found yourself coming to work one morning with the doors barred, IF you were able to hang in there for a month or two without having to fly home right away, you would get another job based on the supply/demand surplus.

[GIR]