JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
matters that consumers should approach with caution. For example, the CAA has handled cases in which consumers have made investments based on promises of “guaranteed profits” through seminars, SNS and the like, but ended up mak - ing losses, or were unable to get refunds or with - draw their funds. 12.3 Responsibility for Losses The extent to which a fintech service provider is responsible for customer losses depends on the nature of the service, the applicable laws, and the contractual agreements between the pro - vider and the customer. In principle, there are no special provisions under Japanese law that impose unique liability on fintech service provid - ers solely because they operate in the fintech sector. Their liability is generally governed by
standard legal principles, such as contract law, tort law and financial regulations. With that said, a fintech service provider may be held liable in the following situations. • Negligence or system failures – if a loss occurs due to a technical malfunction of a service provider’s systems, security breach or operational failure, and the provider failed to implement appropriate safeguards, the ser - vice provider may be required to compensate affected customers. • Regulatory compliance violations – if a provider fails to comply with financial regula - tions, such as the PSA, the APTCP, the APPI or consumer protection regulations, and such failure leads to customer losses, the provider may face administrative penalties and be required to compensate customers.
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