Nova probed over refunds, deception

Government authorities have rapped the knuckles of private English school chain Nova Corp. for allegedly shortchanging students on refunds and providing false accounts of its cancellation policy.

The Ministry of Economy, Trade and Industry and the Tokyo Metropolitan Government inspected Nova's headquarters in Osaka and several schools Wednesday. The company may get a directive forbidding it from enrolling new students if clear evidence of legal violations is found in further investigations, officials said Friday.

According to the officials, several Nova schools failed to give full refunds to students who canceled their remaining lessons after paying in advance.

Other clients have complained that Nova refused to accept their unconditional cancellation, claiming the cooling-off period had expired.

By law, clients of private language schools have an eight-day cooling-off period, during which they are entitled to a full refund if they cancel their contract.

But Nova claimed the cooling-off periods began on the days the applicants registered their names and addresses, and not when they actually signed the contract.

Economy, Trade and Industry Minister Akira Amari said at a press conference Friday, "I think there are problems (with Nova) because the number of reported cases of trouble and complaints exceeded 1,000 cases in fiscal 2005 alone."

A Nova spokesman at its head office in Osaka said the company was not engaged in any unlawful activities.

"How we calculate the refund in case of a cancellation is spelled out in our brochure. We are doing business according to rules," the spokesman claimed.

Founded in 1981, Nova has grown rapidly since the 1990s by charging less for lessons than other English schools, and opening outlets in convenient locations, often near railway stations.

The company was listed in 1996 on the Jasdaq Securities Exchange for startups and now boasts the largest number of students in the industry, with about 480,000 as of September 2005.