Consumer Act of the Philippines

Question 1

Republic Act No. 7394

Answer 1

Consumer Act of the Philippines

It is the policy of the state to protect the interest of the consumer, promote his general welfare, and establish standards of conduct for business and industry.

Question 2

Objectives of Consumer Act of the Philippines

Answer 2

1. protection against hazards to health and safety
2. protection against deceptive, unfair and unconscionable sales acts and practices
3. provision of information and education to facilitate sound choice and the proper exercise of rights by the consumer
4. provision of adequate rights and means of redress
5. involvement of consumer representatives in the formulation of social and economic policies.

Question 3

Duty of the State in Consumer Product Quality and Safety

Answer 3

1. To develop and provide safety and quality standards for consumer products, including performance or use-oriented standards, codes of practice and methods of tests
2. To assist the consumer in evaluating the quality, including safety, performance and comparative utility of consumer products.
3. To protect the public against unreasonable risks of injury associated with consumer products.
4. To undertake research on quality improvement of products and investigation into causes and prevention of product related deaths, illness and injuries
5. To assure the public of the consistency of standardized products.

Question 4

Implementing Agencies

Answer 4

• Department of Trade and Industry
• Department of Health
• Department of Agriculture

Question 5

Requirements of Consumer Product Standards

Answer 5

1. performance, composition, contents, design, construction, finish, packaging of a consumer product
2. kind, class, grade, dimensions, weights, material
3. methods of sampling, tests and codes used to check the quality of the products
4. precautions in storage, transporting and packaging
5. a consumer product must be marked with or accompanied by clear and adequate safety warnings or instructions, or requirements respecting the form of warnings or instructions.

Question 6

Publication of Consumer Product Standards

Answer 6

The concerned department shall, upon promulgation of the standards, publish or cause the publication of the same in two newspapers of general circulation at least once a week for a period of not less than 1 month.

Question 7

Injurious, Dangerous and Unsafe Products

Answer 7

Whenever the departments find, by their own initiative or by petition of a consumer, that a product is found to be injurious, unsafe or dangerous, it shall, after due notice and hearing, make the appropriate order for its recall, prohibition or seizure from public sale or distribution.

Question 8

When a consumer product is determined to be substandard or materially defective, the department shall notify and order the manufacturer, distributor or seller to:

Answer 8

• give notice to the public of the defect or failure to comply with the product safety standards
• give notice to each distributor or retailer of such product

Question 9

Remedies to the injured person under Injurious, Unsafe and Dangerous Consumer Product

Answer 9

a. to bring such into conformity with the requirements of the applicable consumer product standards or to repair the defect in order to conform with the same

b. to replace the product with a like or equivalent product which complies with the applicable consumer product standards which does not contain defect

c. to refund the purchase price of the product less a reasonable allowance for use

d. to pay the consumer reasonable damages as may be determines by the department.

Question 10

Imported Products shall be refused admission if such product

Answer 10

a. fails to comply with an applicable consumer product quality and safety standard rule

b. is or has been determined to be injurious, unsafe and dangerous

c. is substandard

d. has material defect

Question 10

Powers, Functions and Duties of the Concerned Department

Answer 10

a. to administer and supervise the implementation of this Article (17) and its implementing rules and regulations

b. to undertake researches, develop and establish quality and safety standards for consumer products in coordination with other government and private agencies closely associated with these products

c. to inspect and analyze consumer products for purposes of determining conformity to established quality and safety standards.

d. to levy, assess, collect and retain fees as are necessary to cover the cost of inspection, certification, analysis and tests of samples of consumer products and materials submitted in compliance with the provisions of this Article:

e. to investigate the causes of and maintain a record of product-related deaths, illnesses and injuries for use in researches or studies on the prevention of such-product related deaths, illnesses and injuries.

f. to accredit independent, competent non-government bodies to assist in (1) monitoring the market for the presence of hazardous or non-certified products and other forms of violations of Article 18 and (2) other appropriate means to expand the monitoring and enforcement outreach of the department in relation to its manpower.

g. to accredit independent competent testing laboratories

Question 11

Prohibited Acts in Consumer Product Quality and Safety

Answer 11

a. manufacture for sale, offer for sale, distribute in commerce, or import into the Philippines any consumer product which is not in conformity with an applicable product quality and safety standard.

b. manufacture for sale, offer for sale, distribute in commerce, or import in the Philippines any consumer product which has been declared as banned consumer product by a rule in this act

c. refuse access to or copying of pertinent records or fail to refuse permit entry of or inspection by authorized officers or employees of the department

d. fail to comply with an order issued under Article II relating to notifications of substantial product hazards and to recall, repair, replacement or refund of unsafe products.

e. fail to comply with the rule prohibiting stockpiling

Question 11

Penalties under Consumer Product Quality and Standard

Answer 11

Fine - not less than PHP 1,000 but not more than PHP 10,000

Imprisonment - not less than 2 months but not more than 1 year

or both upon the discretion of the court

OFFENDER IS AN ALIEN - he shall be deported after service of the sentence and payment of fine without further deportation proceedings.

OFFENDER IS A NATURALIZED CITIZEN - in addition to the penalty, suffer the penalty of cancellation of his naturalization certificate

Question 12

Protection Against Deceptive, Unfair and Unconscionable Sales Acts or Practices

Answer 12

The State shall promote and encourage fair, honest and equitable relations among parties in consumer transactions and protect consumer against deceptive, unfair and unconscionable sales acts or practices.

Question 13

Implementing Agency for Deceptive , Unfair and Unconscionable Sales Acts or Practices

Answer 13

Department of Trade and Industry

Question 14

When does an act or practice shall be deemed deceptive?

Answer 14

An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or seller, through concealment, false representation or fraudulent manipulation, induces a consumer to enter into a sales or lease transaction of any consumer product or service.

Question 15

The act or practice of a seller or supplier is deceptive when:

Answer 15

a. a consumer product or service has the sponsorship, approval, performance, characteristics, ingredients, accessories, uses, or benefits it does not have.

b. a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is not

c. a consumer product is new, original or unused, when in fact, it is in deteriorated, altered, reconditioned, reclaimed or second-hand state

d. a consumer product or service is available to the consumer for a reason that is different from the fact

e. a consumer product or service has been supplied in accordance with the previous presentation when in fact it is not

f. a consumer product or service can be supplied in a quantity greater than the supplier intends

g. a service, or repair of a consumer product is needed, when in fact it is not

h. a specific price advantage of a consumer product exists when in fact it does not

i. the sales act or practice involves or does not involve a warranty, disclaimer of warranties, particular warranty terms or other rights, remedies or obligations if the indication is false

j, the seller or supplier has a sponsorship, approval, or affiliation he does not have.

Question 16

When does an act or practice shall be deemed unfair or unconscionable?

Answer 16

An act or practice shall be deemed unfair or unconscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer’s physical or mental infirmity, ignorance, illiteracy, lack of time or general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the manufacturer, distributor, supplier, or producer.

Question 17

Unfair and Unconscionable Practices

Answer 17

a. the producer, manufacturer, distributor, supplier or seller took advantage of the inability of the consumer to reasonably project his interest because of his inability to understand the language of an agreement or similar factors

b. when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers

c. when the consumer transaction was entered into, the consumer was unable to receive a substantial benefit from the subject of the transaction

d. when the consumer was entered into, the seller or supplier was aware that there was no reasonable probability or payment of the obligation in full by the consumer

e. the transaction that the seller or supplier induced the consumer to enter into was excessively one sided in favor of the supplier or seller.

Question 18

Home Solicitation Sales

Answer 18

No business entity shall conduct any home solicitation sale of any consumer product or service without first obtaining a permit from the Department.

When Conducted: between hours on 9:00AM to 7:00PM or at any other time the person being solicited has agreed.

by Whom Conducted: person who has proper identification and authority from his principal to make such solicitation.

Question 19

Prohibited Representations in a Home Solicitation Sales

Answer 19

a. the buyer has been specially selected

b. a survey, test or research is being conducted

c. the seller is making a special offer to a few persons only for a limited period of time.

Question 20

Penalties under Title III: Protection Against Deceptive, Unfair and Unconscionable Sales Acts or Practices

Answer 20

Fine - not less than PHP 500 but not more than PHP 10,000

Imprisonment - not less than 5 months but not more than 1 year

or both upon the discretion of the court

Question 21

Implementing Agency under Consumer Product and Service Warranties

Answer 21

Department of Trade and Industry

Question 22

Any seller or manufacturer who gives an express warranty shall

Answer 22

a. set forth the terms of warranty in clear and readily understandable language and clearly identify himself as the warrantor

b. identify the party to whom the warranty is extended

c. state the products or parts covered

d. state what the warrantor will do in the event of a defect, malfunction or failure to conform to the written warranty and at whose expense

e. state what the consumer must do to avail of the rights which accrue to the warranty

f. stipulate the period within which, after notice of defect, malfunction or failure to conform to the warranty, the warrantor, producer, or importer shall be operative from the moment of sale

Question 23

Minimum Standards for Warranties

Answer 23

a. remedy such consumer product within a reasonable time and without charge in case of a defect, malfunction or failure to conform such written warranty

b. permit the consumer to elect whether to ask for a refund or replacement without charge of such product or part, as the case may be, where after reasonable number of attempts to remedy the defect or malfunction, the product continues to have defect or to malfunction.

Question 24

Prohibited Acts under Consumer Product and Service Warranties

Answer 24

a. refusal without valid legal cause by the total manufacturer or any person obligated under the warranty or guarantee to honor a warranty or guarantee issued

b. unreasonable delay by the local manufacturer or any person obligated under the warranty or guarantee in honoring the warranty

c. removal by any person of a product’s warranty card for the purpose of evading said warranty obligation

d. any false representation in an advertisement as to the existence of a warranty or guarantee

Question 25

Penalties under Consumer Product and Service Warranties

Answer 25

Article 67
Fine - not less than PHP 500 but not more than PHP 5,000

Imprisonment - not less than 3 months but not more than 2 years

or both upon the discretion of the court

Chapter III except Article 67
Fine - not less than PHP 1,000 but not more than PHP 50,000

Imprisonment - at least 1 year but not more than 5 years

Question 26

Chapter IV Labeling and Fair Packaging

Answer 26

The State shall enforce compulsory labeling, and fair packaging to enable the consumer to obtain accurate information as to the nature, quality and quantity of the contents of consumer products and to facilitate his comparison of the value of such products.

Question 27

Minimum Labeling Requirements for Consumer Products

Answer 27

a. its correct and registered trade name or brand name

b. its duly registered trademark

c. its duly registered business name

d. the address of the manufacturer, importer, repacker of the consumer products in the Philippines.

e. its general make or active ingredients

f. the net quality of contents, in terms of weight, measure or numerical count rounded of to at least the nearest tenths in the metric system

g. country of manufacture, if imported

h. if a consumer product is manufactured, refilled or repacked under license from a principal, the label shall so state the fact.

Question 28

Price Tag Requirement

Answer 28

It shall be unlawful to offer any consumer product for retail sale to the public without an appropriate price tag, label or marking publicly displayed to indicate the price of each article and said products shall not be sold at a price higher than that stated therein and without discrimination to all buyers.

Question 29

Penalties under Labeling and Fair Packaging

Answer 29

Fine - not less than PHP 500 but not more than PHP 20,000

Imprisonment - not less than 3 months but not more than 2 years

or both upon the discretion of the court

Question 30

Republic Act 10642

Answer 30

Philippine Lemon Law

An Act Strengthening Consumer Protection in the Purchase of Brand New Motor Vehicles

Question 31

RA 10642 covers..

Answer 31

brand new motor vehicles purchased in the Philippines reported by a consumer to be in nonconformity with the vehicles manufacturer or distributor’s standards or specifications within 12 months from the date of original delivery to the consumer or up to 20,000 kilometers of operation after such delivery, whichever comes first.