Photo/Illutration A woman in the Kansai region still keeps a contract signed with Nihon Life Kyokai, a guarantor service, which went bankrupt in 2016. (Haruna Ishikawa)

A growing number of elderly people appear to be having problems with businesses that provide lifelong support services, such as assuming the role of guarantor and handling postmortem arrangements.

In fiscal 2023, consumer affairs centers nationwide received 354 consultations about these businesses, a four-fold increase from 85 consultations a decade earlier, according to the National Consumer Affairs Center of Japan.

The businesses provide support services, for a fee, to elderly people who have no relatives to rely on.

In the Kansai region, a 77-year-old woman and her husband in 2012 signed a contract with Nihon Life Kyokai for more than 3.3 million yen ($22,600).

The contract covered guarantor services, funeral arrangements, disposal of household property after their deaths and other services.

The couple have no children, and the woman, who had thyroid cancer in the past, was particularly concerned about what would happen to her husband if she became bedridden.

However, just four years after the couple signed their contract, Nihon Life Kyokai, a public interest incorporated foundation that had contracts with about 2,600 members, went bankrupt.

It was found that the organization had misappropriated hundreds of millions of yen in deposits from its clients and used the funds for personnel and other expenses.

The couple had used few services but only received a refund of less than 500,000 yen.

Still, the couple soon signed a contract with another guarantor service—paying more than 1.3 million yen in enrollment fees and about 100,000 yen in annual membership fees per person.

The woman said the couple have no relatives or friends to rely on and have no other means to feel secure in their final years without turning to a private-sector guarantor service.

“We’ll need a lot of money if we live a long time,” she said. “I do not want to live that long.”

Lifelong support services include serving as guarantors when clients are hospitalized or admitted to nursing care facilities, accompanying clients on shopping trips and hospital visits and offering postmortem services, such as funeral ceremonies and disposal of household goods and belongings.

While family members and other relatives formerly provided such support, an increasing number of elderly people are living alone.

Interest in these services appears to be growing, partly because some hospitals and nursing care facilities refuse to admit elderly people without a guarantor, although the health ministry has issued a request not to do so. 

Elderly people have consulted with consumer affairs centers over problems that include having signed expensive contracts without understanding the services and fees; being denied services included in their contracts; and deposits not being refunded when contracts are canceled.

In recent years, a growing number of elderly people have also asked consumer affairs centers to confirm if businesses are credible or to recommend trustworthy businesses after seeing advertisements or receiving solicitations by phone.

The number of businesses offering these services is believed to be increasing, but the actual situation remains unclear.

A report released in 2023 by the internal affairs ministry indicates that guarantor and support service businesses have been established by those within a variety of industries.

Of the 204 businesses surveyed, 27 percent were set up by lawyers, accountants and other specialists, 16 percent by companies that help elderly people find homes and nursing care facilities, 12 percent by nursing care service providers and 7 percent by funeral service providers.

The National Consumer Affairs Center of Japan recommends that elderly people confirm services and cancellation terms before signing contracts, notify those around them of the contact information of businesses they have signed contracts with and display the information in an easy-to-find location.

(This article was compiled from reports by Haruna Ishikawa and Fumihiko Yamada.)

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