15 tutoring firms fined US$5.7m for false claims
Print Edition
China’s market regulator fined 15 tutoring firms a total of 36.5 million yuan (US$5.73 million) for misleading advertising and pricing frauds.
The 15 companies include Tencent-backed Yuanfudao, Alibaba-backed Zuoyebang, Wall Street English and New Oriental Education & Technology Group, the State Administration for Market Regulation said yesterday at a news briefing.
Among the wrongdoings were “fabricating teacher qualifications, exaggerating the effects of training ... and fabricating user reviews,” according to the administration.
Some courses offered by the companies were sold at just 1 yuan, discounts that masked the eventual full price.
Bond Education is found to have inflated a package of trial classes to 420 yuan and offering it at an apparent discount of 12 yuan, state broadcaster CCTV reported.
The penalized firms included several with US or Hong Kong listings, including TAL Education Group, OneSmart Education Group, Beststudy Education Group and Scholar Education.
Yuan Xilu, an official with the regulatory body, noted that their malpractices had damaged the legitimate rights and interests of students and disrupted the orderly market competition.
The firms have been urged to rectify their problems, and recidivism will mean business suspension or license revocation, he added.
The tutoring industry should not develop for profiteering, and disorderly expansion should be forestalled, said Yuan, adding that market regulators will build a long-term mechanism of oversight and improve the code of conduct and supervision principles.
The first quarter of 2021 saw surging complaints about the tutoring industry, with the total number of complaints filed by consumers via the online service platform “12315” topping 47,000, up 65 percent from a year earlier, he said.
Intense competition starting from a young age has amped up the pressure on China’s parents to pay extra to get their children ahead in the competitive education system.
Working with the state regulator, Guangdong Province and Shanghai market supervisory bodies issued fines to companies over pricing and advertising frauds.
Six companies were fined 14 million yuan in Guangdong, the local regulator said in a statement. It said the companies made up teachers’ diplomas, teaching qualifications and experience, and made false promises to students.
The Shanghai watchdog announced on its WeChat account that it had fined four companies — Wall Street English, DaDa, Zhangmen.com and OneSmart International Education Group — 10 million yuan for violating China’s price law and for unfair competition.
DaDa, an online education institution, exaggerated its training ability and fabricated its faculty’s qualifications. The promotions on its app and WeChat account featured claims like “15 minutes, 30 days, say goodbye to Chinglish.”
The Shanghai Administration for Market Regulation said that DaDa claimed “70 percent of Chinese parents are worried about their children’s English abilities,” and “100 percent of our teachers are foreigners from native English-speaking countries.”
These claims were found to be fake or misleading, the regulator said.
Misleading pricing
DaDa was also found to have fabricated or used misleading pricing means to trick consumers into deals, as no transaction was made based on its so-called original course prices when it offered discounts.
Wall Street English was found to have violated China’s price law while selling courses on its WeChat account. It made false claims on its app that it had hosted 25 training camps and 86 students won Swatch watches as gifts.
The company exaggerated the number of courses, applications and gifts distributed, which constituted to fake or misleading commercial promotions and was against China’s anti-unfair competition law.
The English training institution said it has begun to rectify its pricing and promotion irregularities and will improve management.
Zhangmen.com was found to have exaggerated the number of applicants, the background of its teachers and its “magic” in accurately predicting the content of examination papers for national college entrance exams. It was also found to have violated China’s price law.
OneSmart International Education Group was found to have fabricated its teachers’ qualifications and their training and teaching background, and violating China’s price law.
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