This is not the first time the eikaiwa giant has been pulled up for dishonest business practices. A court ruled against NOVA in a lawsuit filed by a student seeking the return of 700,000 yen in lesson fees in May 2003, and the National Consumer Affairs Center of Japan said that it has received 7,750 complaints and inquiries about the compant since 1996.

http://mdn.mainichi-msn.co.jp/national/news/20070216p2a00m0na017000c.html

Nova is suspected of refusing to refund the correct amount to students and lying to them about the cancellation process, sources said.If Nova is found to have violated the law on certain business transactions, the industry ministry could impose disciplinary measures, including a temporary ban on collecting new students, they added.

A public relations official at Nova acknowledged the offices were inspected by the ministry.

http://www.asahi.com/english/Herald-asahi/TKY200702160266.html

Private English school chain operator Nova Corp has been inspected by government authorities for allegedly requiring high cancellation costs from students and having provided them with false accounts on its cancellation policy, government officials said Friday.

Several schools of the chain featuring outlets located near railway stations have refunded canceling students the remaining value from their lesson fees paid in advance in smaller amounts than expected, the officials said.

Headquartered in Osaka, the leading English school business in Japan has also caused trouble with their clients by refusing unconditional cancellations with the argument that the cooling-off period had expired.

The law governing businesses offering private language courses ban the firms from providing false or insufficient accounts of their services and require them to accept cancellation unconditionally during an eight-day cooling-off period.

But Nova claimed that the cooling-off periods for the clients concerned were over as they had begun on the days the applicants registered their names and addresses with it.

In refunding for midterm cancellation, the Nova schools in question used a payment structure different from the one applied for the students’ enrollment, according to the officials.

The Ministry of Economy, Trade and Industry and the Tokyo metropolitan government have jointly conducted an on-site inspection and will slap an administrative sanction on Nova after confirming evidence of its violation of the law, they said.

Economy, Trade and Industry Minister Akira Amari said at a press conference Friday, “I think there are problems as the number of reported cases of trouble and complaints with Nova is outstanding.”

The authorities are questioning people involved and analyzing results of their inspection with an eye toward actions against the firm including that of ordering Nova to suspend activities to solicit new subscribers, the officials said.

The company has responded to the government probe that it was engaged in no wrongdoing, they said.

Founded in 1981, Nova has grown rapidly since the 1990s by selling its lesson fees cheaper than other English schools as well as accessible locations of its outlets.

It was listed in 1996 on the Jasdaq Securities Exchange for start-ups and now boasts to be the largest player in the industry with about 480,000 students as of September 2005. 

http://www.japantoday.com/jp/news/399281