The law that safeguards and protects the consumers in the Philippines is the Republic Act 7394 (R.A. 7394).
What is Republic Act 7394?
Republic Act 7394 (RA 7394) is the "Consumer Act of the Philippines" which was promulgated on July 15, 1992. It is the policy of the State to protect the interest of the consumer, promote his general welfare and to establish standards of conduct for business and industry.
What are the objectives of the RA 7394 or otherwise known as "Consumer Act of the Philippines?
- Protection of consumers against hazards to health and safety;
- Protection of consumers against deceptive, unfair and unconscionable sales acts and practices; ("unconscionable" means not right, not reasonable or not guided by conscience)
- Provision of information and education to facilitate sound choice and the proper exercise of rights by the consumer;
- Provision of adequate rights and means of redress ("redress" means remedy or to set right <an undesirable or unfair situation>);
- Involvement of consumer representative in the formulation of social and economic policies.
The following agencies implement the Consumer Act:
- Department of Trade and Industry (DTI)
DTI handles the following areas of concern:
- Consumer Products and Service Warranties
- Consumer Product Quality and Safety
- Deceptive, unfair and unconscionable sales acts and practices
- Price Tag
- Weights and measures (metrication)
- Labeling and Packaging
- Advertising and sales promotion
- Liability for Products and Services
- Service and repair shops
- Department of Agriculture (DA)
- Agricultural Products
- Quality and Safety
- Labelling and Packaging
- Department of Education (DepEd)
- Consumer education and information
- Department of Health (DOH)
When is the Consumer Act applicable?
- Food, drugs, cosmetics and devices and hazardous substances
- Quality and safety
- Price Tag
- Labelling and Packaging
- Advertising & Sales Promotion
- Bangko Sentral ng Pilipinas (BSP)
- Consumer credit transactions extended by banks and other financial intermediaries
- Securities and Exchange Commission (SEC)
- Credit facilities extended to consumers by financing companies
The Act is applicable if:
- the COMPLAINANT is a natural person;
- the SUBJECT of the violation is a consumer product or service; and
- the NATURE of the complaint is regarding any of the aforementioned concern
Consumer product or service means goods, service and credits, debts or obligations which are primarily for personal, family, household or agricultural purpose, which shall include, but not limited to food, drugs, cosmetics and devices.
What should a consumer do if he/she has a complaint?
- Identify the problem. Create a fair settlement. Would any of the following options do:
- money back (Refund)?
- product repair (Repair)?
- exchange or change item (Replace)?
- Gather documentation as much as you can regarding your complaint. Examples of documents you can gather are sales receipts, warranties, repair orders, contract/agreement, cancelled checks, or any document which will support the complaint. These documents will serve as your evidence or proof.
- Go back to the store or office where you made the purchase. Talk to the person who sold you the product or service. Be calm and accurate in telling the problem and what steps should be taken in order to solve the problem. If that person irritates you and doesn't help, talk to the supervisor or manager and tell your complaint. A huge percentage of consumer problems are resolved at this level.
- If you are not satisfied with the support, write a formal letter of complaint to the concerned government consumer protection agencies in the Philippines mentioned above.
- In the letter, indicate your name and address; the name and address of the establishment against whom you are complaining; the circumstances regarding the complaint including names, places and dates etc.. Enclose supporting documents such as official receipts, deed of sale and the like. And be prepared to make a personal appearance when called, especially during the mediation conference.
Within 2 years starting from the time the consumer transaction happened (when the deceptive or unfair transaction took place).
To whom does a consumer file a complaint?
In the Provincial Office. The administrative complaint shall be filed in duplicate with the Provincial Office having jurisdiction over the subject of the complaint. In areas where there are no Provincial Offices, the complaint shall be filed in the Regional Office.
In cases where the complainant and respondent are situated in different provinces, the complainant has the option to choose the place where to file the complaint. The civil/criminal action shall be filed with the appropriate regular courts (Municipal Trial Court/Regional Trial Court).
What are the remedies available to consumers?
For Administrative Proceedings:
- replacement or repair of product or services
- reimbursement to complainant of amount spent in pursuing the complaint
- refund of payment made
- restitution or rescission of contract
- civil action
- refund of payment made
- award of damages
- restitution or rescission of contract
- replacement or repair of product or services
- reimbursement to complainant of amount spent in pursuing the complaint
- criminal action - defendant, if found guilty by the court can be sentenced to imprisonment or payment of fine or both, at the discretion of the court.
The advantages are:
o You can save more money and time in mediation/arbitration.
o You can avoid more hassles. Complainant need not undergo the rigors and expense of a court case
How are consumer complaints resolved?
Complaints are resolved through:
- The implementing agency where the complaint is filed, after jurisdiction is determined, will call the parties for mediation conference and find ways for amicable settlement.
- If no amicable settlement is arrived at, the complaint will be scheduled for preliminary conference for the parties to enter into stipulation of facts or arrive at simplification of issues.
- Formal hearing will be conducted by the Arbitration Officer and decision will be rendered.
- Decision of the Arbitration Officer is appealable to the Secretary of the concerned Department within 15 days from receipt of the decision.
- Decision of the Department Secretary is appealable within 15 days from receipt of the decision to the Intermediate Appellate Court or the Supreme Court on the following grounds:
- There is grave abuse of discretion.
- The decision rendered was in excess of jurisdiction or authority of the Arbitration Officer
- The decision is not supported by evidence or there is serious error in findings of facts.
Administrative penalties that can be imposed are:
- The issuance of a cease and desist order, provided, however, that such order shall specify the acts that respondent shall cease and desist from and shall require him to submit a report of compliance therewith within a reasonable time;
- The acceptance of a voluntary assurance of compliance or discontinuance from the respondent which may include any or all of the following terms and conditions:
- an assurance to comply with the provisions of this Act and its implementing rules and regulations;
- an assurance to refrain from engaging in unlawful acts and practices or unethical trade practices subject of the formal investigation;
- an assurance to comply with the terms and conditions specified in the consumer transaction subject of the complaint;
- an assurance to recall, replace, repair or refund the money value of defective products distributed in commerce;
- an assurance to reimburse the complaint out of any money or property in connection with the complaint, if any, and to file a bond to guarantee compliance therewith.
- Restitution or rescission of the contract without damages;
- Condemnation and seizure of the consumer product found to be hazardous to health and safety, unless the respondent files a bond to answer for any damages or injury that may arise from the continued use of the product;
- The impositon of administrative fines in such amount as deemed reasonable by the Secretary, which shall in no case be less than Five Hundred Pesos (P500.00) nor more than Three Hundred Thousand Pesos (P300,000.00) depending on the gravity of the offense, and an additional fine of not more than One Thousand Pesos (P1,000.00) for each day of continuing violation.
