CONSUMER PROTECTION LAWS

Consumer law helps to make sure that customers are aware of what they are buying, such as the ingredients in food;
that advertising is fair and does not mislead; that debt collection is fair, and nearly every step in the buying and selling
of goods is ordered towards creating a level playing field.

8 BASIC RIGHTS OF CONSUMERS

What to do?
Right that guarantees survival, adequate • Prioritize your needs
1. Right to basic
food, clothing, shelter, health care, • Know your needs and wants
needs
education, and sanitation. • Look for quality, not quantity
• Be quality conscious not brand conscious
What to check for in labels?
Right to be protected against the marketing of
• Consumed before, expiry date, best before
2. Right to safety goods or provision of services that are
• FDA-approved
hazardous to health and life.
• Caution/warning, Signs and Symbols
What to do?
• Read the label
Right to be protected against dishonest or
• Know the concerned agency
3. Right to misleading advertising and labeling, and
• Call DTI DIRECT (02) 751-3330
information the right to be given the facts and information
• Before signing warranties or other documents, read
needed to make an informed choice.
everything esp. the fine prints.
• Look for the name and address of the manufacturer
What to do?
• Read the labels or manuals of the products
Right to choose products at competitive • Generic vs. Branded
4. Right to choose prices with an assurance of satisfactory • Canvass before buying
quality. • If product testers are available, try them
• Be wary of special offers like free items or Buy 2
Take 1
What to do?
• Take time to attend public hearings and
consultations
5. Right to Right to express interests in the making and • Be observant as to how consumer laws are being
representation execution of government policies. • implemented in your area
• Propose to legislators, policies/laws that will ensure
that the consumers would get the best value for
their hard-earned money.
What to do?
Right to be compensated for
• Go back to the store and look for the Consumer
misrepresentation, shoddy goods or
Welfare Desk (CWD) to air your complaint
unsatisfactory services.
6. Right to redress • 3Rs - Repair then Replace or Refund
• If the store is unresponsive, file your complaint to
Note: “No Return, No Exchange Policy” is
the appropriate agency
PROHIBITED.
• Be sure to attend the mediation conference
What to do?
• Read, listen, watch
• Involve yourself
7. Right to
Right to acquire the Knowledge and skills • Participate in consumer education activities
consumer
necessary to be an informed consumer. • Look out for Quad-media campaigns on consumer-
education
related issues, Seminars, conferences, for a,
trainings and public hearings, or Integration of
consumer education in schools
8. Right to a Right to live and work in an environment which
healthy is non-threatening to the well-being of present
environment and future generations.

Consumer Act of the Philippines (RA 7394) Objectives:

1. Protection against hazards to health and safety;
"The State shall protect consumers from trade 2. Protection against deceptive, unfair and
malpractices and from substandard or hazardous unconscionable sales, acts and practices;
products." 3. Provision of information and education for sound
- Art. XVI, Gen Provision, Sec. 9 1987 Constitution choice by consumers;
4. Provision of adequate rights and means of
Note: The law took effect on July 15, 1992. redress
5. Representation of Consumers in social and
Basic Policies: economic policy formulation
1. Protect the interest of the consumer and promote his
general welfare.
2. Establish standards of conduct for business and
industry.

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 IMPLEMENTING AGENCIES Chain Distribution Plan Or Pyramid Scheme
1. Consumer Product Quality 8 Point Test (to know if there is a pyramid scheme)
and Safety 1. Is there a product?
2. Deceptive, Unfair and 2. Are commissions paid on sale of products and not on
Unconscionable Acts and registration/entry fees?
Practices 3. Is the intent to sell a product not a position?
3. Weights and Measures 4. Is there no direct correlation between the number of
Department of (Metrification) recruits and compensation?
Trade and 4. Consumer Products and 5. If recruitment were to be stopped today, would the
Industry (DTI) Service Warranties participants still make money?
5. Labelling and Packaging 6. Is there a reasonable return policy?
Note: 1,2,4,5,6 6. Price Tag 7. Do products have a fair market value?
are covered in 7. Liability for Products and 8. Is there a compelling reason to buy?
the CPALE TOS Services
8. Regulation of Service and ➢ If answer to all is YES – Legitimate Company
Repair Shops ➢ If even one question the answer is NO, - High
9. Advertising and Sales probability that it is a PYRAMID SCAM.
Promotion
10. Consumer Credit Transaction Unfair or Unconscionable Sales or Practices
• It is committed whenever the producer, manufacturer
Department of • Quality and safety and or distributor, supplier or seller, by taking
Agriculture labelling and packaging of advantage of the consumer's physical or
(DA) agricultural products mental infirmity, ignorance, illiteracy, lack of
• Labelling and packaging, time or the general conditions of the
Department of advertising, and sales environment or surroundings, INDUCES, the
Health promotion of food, drugs, consumer to enter into a sales or lease transaction
cosmetics and devices, and grossly inimical to the interests of the consumer or
hazardous substances grossly one-sided in favor of the producer,
Department of manufacturer, distributor, supplier or seller.
• Consumer education and • Transaction is grossly inimical to consumer.
Education
information in the curriculum • One-sided, in favor or manufacturer, seller or
(DepEd)
1. Weights and Measures supplier
Local 2. Regulation of preparation and • Consumer was unable to receive a substantial
Government sale of meat, fresh fruits, benefit from the transaction.
Units (LGUs) poultry, milk, fish, vegetables • The seller or supplier was aware that there was no
and other food products for reasonable probability of payment of the obligation in
consumption full by the consumer.
• Price grossly exceeded the price at which similar
A. Protection against Deceptive, Unfair and products or services were sold.
Unconscionable Sales Acts or Practices
Gift Check Policy
Deceptive Sales Acts or Practices • No More Expiry Date
• An act or practice is deemed the producer,
manufacturer, supplier or seller, through B. Consumer Products And Service Warranties
concealment false representation of fraudulent
manipulation, induces a consumer to enter into a Warranty - A contract whether express or implied
sales or lease transaction of any consumer product or between the buyer and the seller of a consumer product
service." or owner of a service firm concerning the rights and
• Generally, when an establishment lies to you or obligations of both parties.
hides a material fact to entice you to buy, he has
committed a deceptive sales act. Law on Sales - Primary law governing all contract of
sales with conditions and warranties.
Note: There are ten (10) deceptive acts.
Express Warranty
Forms of Deception: • Operative from the moment of sale
1. A product has the sponsorship or approval of a body • Sales report should be made by the distributor within
it does not have 30 days to the manufacturer, producer or importer
2. It has the performance, characteristics, ingredients, • Failure to make or send report relieves the
accessories, uses or benefits it does not have manufacturer, producer or importer of the
3. A product or service is of a particular standard, liability under the warranty and the distributor is
quality, grade, style or model when in fact it is not personally liable under the warranty.
4. It is new, original or unused when in fact it is
deteriorated, altered, reconditioned, reclaimed or What should be stated in an Express Warranty?
second-hand state • The terms of warranty, written in clear and readily
understandable language;
Presentation & Demonstration (Expectation vs. • The warrantor's identity;
Reality) • The party's identity to whom the warranty is
• Deceptive presentation of consumer products extended;
• Deceptive demonstration of consumer products, • The products or parts covered;
services
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• The warrantor's action plan in the event of a defect, Options Given To Consumer In Case Of Breach Of
malfunction or failure to conform to the written Implied Warranty
warranty; 1. RETAIN goods and recover damages
• The directive to the consumer to avail of the right 2. REJECT the goods, CANCEL contract, and recover
which accrue to the warranty; what you have paid, including damages
• The period within which, after notice of defect,
malfunction, or failure to conform to the warranty, the What are the responsibilities of the seller or vendor as
warrantor will perform any obligation under the to the quality or fitness of the product sold in case
warranty. there is no express warranty given to him?
• Liable to the buyer in an implied warranty if buyer
Note: expressly or impliedly says the purpose for which the
• The retailer is subsidiarily liable under the goods are acquired. The vendor, by implication,
warranty in case of failure of both the warrants the general fitness or quality of the
manufacturer and distributor to honor the warranty. product sold to the buyer.
• The purchaser needs only to present the warranty • Liable to the buyer if such buyer relies on the
card or the official receipt along with the product seller’s skill or judgement.
to be serviced or returned to the immediate seller.
• Any stipulation to the contrary shall be null and Note:
void. • Provision of the rules on warranty DO NOT APPLY
to professional services.
Designation of Warranties • Service firms are to guarantee workmanship and
• a written warranty is required to clearly and replacement of spare parts for a period of not
conspicuously designate such warranty as: less than 90 days which period is to be indicated
a.) Full Warranty - if the written warranty meets in the pertinent invoices.
the minimum requirements
b.) Limited Warranty - if the written warranty does What are the instances where a vendor or seller may
not meet such minimum requirements
not be held liable in case of defects?
1. If there are patent defects or
Minimum Requirements:
2. if the defect is clearly visible upon inspection of the
1. There should be a REMEDY or relief offered to a
product bought.
consumer within the reasonable time and without
- In case the defects are not visible, and the
charge in case of defect, malfunction, or failure to
buyer is an expert, who by reason of his trade
conform with such written warranty.
or profession should have known the defects,
2. The warranty should give an option for REFUND OR
then the vendor or seller may not be held liable.
REPLACEMENT without charge where after a
reasonable attempt to remedy defect/malfunction,
Prohibited Acts:
the product continues to have defects/malfunctions.
1. Refusal to without any valid legal cause by the
local manufacturer or any person obligated under the
XPN: The warrantor is not to be required to perform the
warranty or guarantee to honor a warranty or
above duties if he can show that the defect, malfunction,
guaranteed issued;
or failure to conform to a written warranty was caused
2. Unreasonable delay by the local manufacturer or
by damage due to unreasonable use thereof.
any person obligated under the warranty or
guarantee in honoring the warranty;
Duration of Warranties
3. Removal by any person of a product's warranty card
• The seller and the consumer may stipulate the
for the purpose of evading said warranty obligation;
period within which the express warranty is
and
enforceable.
4. Any false representation in an advertisement as to
• If the implied warranty on merchantability
the existence of a warranty or guarantee.
accompanies an express warranty, both will be of
equal duration.
C. Labelling and Packaging
• Labels should be conspicuous and easily
Note: Any other implied warranty is to endure not less
understandable under customary conditions of
than 60 days nor more than one year following the sale
purchase or use.
of new consumer products.
Labelling Requirements:
Options Given To Consumer In Case Of Breach of
• Address of the manufacturer, importer/re-packer of
Express Warranty
the consumer products in the Philippines
1. REPAIRED. Warrant work must be made
• Country of manufacture
within 30 days. It may be extended by conditions
• Mandatory translation in the English or Filipino
beyond the control of the warrantor or his
language in the label
representatives
• Required information of consumption duration safety
2. REPLACED. Product or its parts may be replaced.
• Warranty of the manufacturer
3. REFUND. May ask for a refund for the amount
• Weight content prior to the packaging
directly attributable to the use of consumer
• Consumer Complaint desk address
prior to the discovery of the non-conformity
• All other information that fits the parameters of the
shall be deducted.
consumers right to information

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Prohibition Of No Return, No Exchange Policy practices, provide information and education to
• It is deceptive. It creates a misconception on the facilitate sound choice and the proper exercise of
part of the consumers that they do not have the right rights by the consumers, provide adequate rights
to: and means of redress
(a) return shoddy or defective goods; or
(b) demand remedies in case of defective or What is a price tag?
imperfect service. • Price tag is a label attached to a commodity stating
the price at which it is offered for sale.
Can business establishments
still issue official receipts The Need for Price Tags
NO
with the "no return, no • To provide buyers with adequate information and
exchange policy"? guide to enable them to compare quality and prices
If an item bought from a store of goods and patronize stores selling quality products
Y turns out to be more at low prices.
expensive than a similar • To discourage and minimize haggling which is a
NO
item in store X, can the waste of time and energy of both buyer and seller.
customer return the item and • To expedite transactions and enable both the
ask for a refund? buyer and seller to use the time and energy for more
Can a store exercise only a productive endeavors.
policy of exchange but not NO
refund? General Requirement:
If the defect is due to • All consumer products sold in retail shall have an
mishandling on the part of appropriate price tag label or marking indicating
the buyer, can he still return NO the price of the article.
the item and demand • Consumer products shall not be sold at price
exchange or return? higher than the price stated in the price tag.
If after buying a certain item,
a customer changes his Exceptions:
mind and wants to return NO • Minute or tiny articles, e.g. drugs, medicinal
said item, can he invoke the instruments, hardware, plumbing fixture, electrical
prohibition? supplies, pieces of jewelry.
There is no hard and • Perishable products, like vegetables, meat, and
Is there a time limit within poultry products.
fast rule. It depends
which a buyer may return • Nature of the product makes it impractical to place
on what is stated in
defective products? a price tag.
the express warranty.
YES, provided he can
Can a buyer return defective Characteristics of a Price Tag:
prove that it was
goods without an official • Be clearly written;
bought from a certain
receipt? • State the price of the commodity per unit (piece,
store.
Can a store print in their package, pair, dozen, set, kilogram, meter, liter, etc.)
invoices the statement in pesos and centavos, Philippine currency, except
"exchange of when a law or regulation allows consumer products
merchandise will not be NO to be sold in foreign currency as in the case of duty-
accepted without a valid free shops; and
receipt or other evidence • Bear no erasures or alterations of any sort.
of purchase?
What should the consumer File a Complaint Note: Erasures or alterations are allowed only in price
do in case of violation? with DTI. reduction sales promotion campaigns.
All complaints should
Where should the complaint be addressed to the
be filed? provincial office of One Price Tag Requirement
DTI. • Every retailer is required to display a price tag to
• For Quality indicate the price of each consumer good and
Imperfection – service.
Replacement • The price tag must be written clearly, indicating
What are the remedies • For Quantity the price of the consumer product including the
available to consumers? Imperfection – Value Added Tax (VAT) whenever the consumer
Reimbursement product is vatable.
Or Reduction in
price Use Of Codes In Price Tags
GR: Shall NOT be written in code.
Price Tag Law (Consumer Act – RA 7394) XPN:
• If the codes are used in addition to price tags,
• The State shall ensure safe and good quality of food, labels, markings, or price lists
drugs, cosmetics and devices, and regulate their • If the codes are used in combination with shelf
production, sale, distribution and advertisement to pricing which when scanned will show the price.
protect the health of the consumer.
• RA 7394 aims to protect consumers against hazards
to health and safety, protect consumers against
deceptive, unfair and unconscionable sales acts and
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Requirements For Establishments Intending To • Within the first 12 months, if that car has gross
Use Codes In Combination With Shelf Pricing defects and unresolved problems, and if all four
• The establishment should use itemized receipt or repair attempts have not worked, it is considered
cash register tape which states the description, a lemon car.
size, quantity, and individual price of the consumer
goods purchased. Specific Defects the Law Acknowledges
• Each establishment shall install at least one Price • This consumer protection law acknowledges all and
Verification Counter (PVC) or similar electronic any factory defects that are detrimental to the
system strategically located in the establishment, car's performance and safety, which fails to the
provided that in case the establishment. structure is manufacturer's standards and meet warranty claims.
multi-storey, at least one PVC shall be installed per • If flaws are identified, the dealer must take the
storey. responsibility to resolve the defective issues.

Payment Under Price Tag Law Coverage Of Lemon Law:

• When the consumer pays in cash, he shall pay only General Rule:
the price indicated in the price tag. 1. Brand new motor vehicles (BNMV) purchased in
• When the consumer pays through the Philippines
credit/ATM/debit card, he shall pay only the price - constructed entirely from new parts
indicated in the price tag. - covered by a manufacturer's express
• When the retailer offers the consumer an option to warranty at the time of the purchase
pay in cash, card or in installment, the same is - has never been sold or registered with the
allowed provided the payment options shall be DOTC or an appropriate agency or authority
disclosed by way of separate information to the - has never been operated on any highway of
consumer but not in the price tag. the Philippines, or in any foreign state or
country
Price Reduction/Sales Promotion
• The usual price of product/service on sale as Motor Vehicle
well as the promotion price/or percentage of
price reduction shall be INDICATED in the price ANY self-propelled FOUR WHEELED road vehicle to
tag/price list. carry passengers.
VEHICLES COVERED IN LEMON LAW
Prohibition Against Surcharging by Retailers INCLUDED EXCLUDED
• All retailers who honor or accept credit, ATM, or 1. Sedan 1. Motorcycles
debit cards for payment shall NOT REQUIRE the 2. Coupes 2. Delivery trucks
cardholder to PAY A SURCHARGE or EXTRA 3. Station wagons 3. Dump trucks
CHARGE over and above the prices of consumer 4. Convertibles 4. Buses
goods and services. 5. Pick-ups 5. Road trollers
6. Vans 6. Trolley cars
When a consumer product is too 7. Sport Utility Vehicles 7. Sprinklers
small or the nature of which (SUVs) 8. Lawn mowers
When is a price
makes it impractical to place a 8. Asian Utility Vehicles 9. Bulldozer
list allowed?
tag thereon; and in case of (AUVs) 10. Grader
consumer services. 11. Pay loader
Is a price tag Yes, samples or dummies of 12. Forklift
required on products offered for sale on retail 13. Amphibian truck
samples or when displayed within the retail 14. Crane
dummies on outlets shall also bear the prices of 15. Vehicles that run only
display? products which they represent. rails and tracks
Yes, in the case of lumber sold, 16. Tractors, trailers etc.
displayed or offered for sale to the
Is price tag
public, the same shall be tagged or 2. Reported by a consumer to be in
required for
labeled indicating thereon the nonconformity with the vehicle's manufacturer or
lumber?
price and the corresponding official distributor's standards or specifications
name of the wood. - any defect or condition that substantially
impairs the USE, VALUE, or SAFETY.
Philippine Lemon Law (RA 10642) - It prevents BNMV from conforming to the
manufacturer's or distributor's standards or
• Promote full protection of to the rights consumers specifications, which CANNOT BE REPAIRED.
in the sale of motor vehicles against abuses and
trade practices which are unfair or deceptive, Standards and specifications of MV
otherwise inimical to consumers and public interest • refers to standards, description, parts,
• RA 10642 or Philippine Lemon Law, it strengthens accessories and other specifications such as but
consumer protection in relation to the purchases of not limited to those contained in:
Brand-New Motor Vehicles. - Manufacturer's or Distributor's Manual
• It took effect on August 7, 2014. - Owner's Manual
- And motor vehicle specification
Lemon Car
• A newly purchased vehicle bought from an
authorized dealership in the Philippines.

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3. within 12 months from original delivery to the 6. Dealer presents the parts replaced & furnishes
consumer, or up to 20,000 kilometers of results of test activity.
operation after such delivery, whichever comes 7. Consumer receives the MV & given 15 days
first. to evaluate the repair.
8. Recurrence of same complaint & return of MV
Exceptions: after 15-day evaluation period counted as next
Conditions resulting from: repair attempt.
1. Noncompliance by the obligations under the 9. Repair(s) covered by manufacturer’s
warranty. consumer's warranty not charged for labor & parts.
2. Modifications not authorized by the
manufacturer or distributor except those not (b) Consumer's Written Notice of Availment of
affecting safety, use or value Lemon Law Rights
3. Abuse is usage not according to and neglect is • The consumer notifies, in writing, the
improper and irregular maintenance under manufacturer, distributor, authorized dealer or
4. the Owner's Manual or Manufacturer's Service or retailer of the unresolved complaint &
Warranty Booklet. consumer’s intention to invoke his rights within
5. Accident man-made event which manufacturer, the Lemon Law.
distributor authorized dealer retailer has no control;
force majeure event caused by elements or forces (c) Documentary requirements to invoke Lemon
of nature. Law Rights
• Warranty / Service Booklet
Note: Since modifications are not allowed, Lemon Law • Current Motor Vehicle (MV) Registration
does NOT cover modified cars. • All repair/job order invoices
• Notice of Availment
How Does the Lemon Law Work?
• In case your brand-new vehicle detects a problem, (d) Final Repair Attempt
you need to bring it to the dealer right away. • After filing the notice of availment, the
• After your complaint is recorded, the dealer will consumer brings the MV to manufacturer,
make at least four attempts (in 1 year) to repair distributor, authorized dealer or retailer from
it. where the vehicle was purchased for a final
• If the dealer fails to fix your car problem, you can file repair attempt to address the complaint of the
the claim form and wait for the next step. consumer to his or her satisfaction.
• The dealer may support you for a daily means of
transportation or alternative vehicle during the (e) Filing of a Complaint Before the DTI
fixing time. • In case, the conformity issue remains
unresolved despite the manufacturer,
Steps in Repair Attempts & Lemon Law Rights Availment: distributor, authorized dealer or retailer's efforts
(a) 4 Separate Repair Attempts to repair the vehicle, pursuant to the consumer's
• Conducted by the same manufacturer, availment of his or her Lemon Law rights, the
distributor, authorized dealer for the same consumer may file a complaint before the DTI.
complaint, and the nonconformity issue
remains.
Compensation for the Customer During Unit Repair
Repair Attempt • Either a daily transportation allowance or a
• A process that begins when the consumer service vehicle
brings the MV to manufacturer, distributor ➢ Daily Transportation Allowance
authorized dealer or retailer for repair of a - amount covers the transportation of the
specific complaint consumer from his or her residence to his or
• Repair shall be composed within 15 days from her regular workplace or destination and vice
delivery of MV to the dealer versa
• Excess of the 15-day period shall be added to - Equivalent to air-conditioned taxi fare, as
the Lemon Law Rights period of the MV evidenced by official receipt, or in such
amount to be agreed upon by the parties
Note: Incomplete repair attributable to the Dealer is
treated as one repair attempt ➢ Service Vehicle
- at the option of the manufacturer, distributor,
Repair Attempt Process (Procedure) authorized dealer or retailer
1. Consumer and/or duly authorized
representative brings MV to the same • He/she can request the dealer to replace the unit
authorized dealer to report and/or demonstrate with a similar car or a model of higher value. The
the complaint. (Bring it to CASA) consumer has to pay the additional cost if he/she
2. Dealer receives the MV & records the complaint. chooses to have a more expensive model.
(Records Complaint)
3. Dealer advises proposed repairs & estimated Note: Any disagreement shall be resolved by the DTI
time to complete.
4. Consumer authorizes repair by signing Applicability of Other Laws
repair/job order. • Lemon Laws shall not be construed to limit or
5. Dealer releases the MV with inventory of repairs impair the rights and remedies of a consumer
as completed and parts replaced. under any other law. Basically, if another law is more
favorable to you, then that may be applied.
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Dispute Resolution Mechanism
• Meditation – 10 Days
- DTI to independently establish the validity of the
consumer's outstanding complaint
- Any cost incurred in establishing the validity of
the consumer's complaint shall be borne jointly
by the consumer and the manufacturer,
distributor, authorized dealer or retailer.
• Adjudication – 20 days
- Consumer to deposit ₱10,000 in an escrow
account in a bank
- Available remedies:
▪ Replacement of motor vehicle with a similar
or comparable motor vehicle in terms of
specifications and values, subject to
availability; or
▪ Accept the return of the motor vehicle and
pay the consumer the purchase price plus the
collateral charges.

Reselling Non-Defective Units if Returned

• The dealer can sell it to another person, as long as
the new buyer is given full documentation of its
history.
• If not followed, it may result in the dealer paying
₱100,000 in damages to the new buyer without
prejudice to any civil or criminal liability.

Disclosure on Resale
• Manufacturer, distributor, authorized dealer or
retailer shall, prior to sale or transfer, disclose in
writing to the next purchaser the following
information:
- motor vehicle was returned to the
manufacturer, distributor, authorized dealer or
retailer
- nature of the nonconformity which caused the
return
- condition of the motor vehicle at the time of the
transfer to the manufacturer, distributor,
authorized dealer or retailer

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