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On Consumer Act of the Philippines
(R.A. 7394)


1. Q. What is R.A. 7394?
     
  A. RA 7394 is the Consumer Act of the Philippines which took effect on 15 July 1992.
     
2. Q. State briefly the Declaration of Basic Policy.
     
  A. 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.
     
3. Q. What are the objectives of the Consumer Act?
     
  A.

The objectives of the Act are:

    • Protection of consumers against hazards to health and safety;
    • Protection of consumers against deceptive, unfair and unconscionable sales acts and practices;
    • 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;
    • Involvement of consumer representative in the formulation of social and economic policies.
4. Q. Which government agencies implement the Consumer Act and what are their areas of concern?
     
  A. The following agencies implement the Consumer Act:

    • Department of Trade and Industry (DTI)
    • Consumer Product Quality and Safety
    • Deceptive, unfair and unconscionable sales acts and practices
    • Weights and measures (metrication)
    • Consumer Products and Service Warranties
    • Price Tag
    • Labeling and Packaging
    • Liability for Products and Services
    • Service and repair shops
    • Advertising and sales promotion
    • Department of Agriculture (DA)
    • Agricultural Products

      • Quality and Safety
      • Labelling and Packaging

    • Department of Education, Culture and Sports (DECS)

      • Consumer education and information

    • Department of Health (DOH)
    • Food, drugs, cosmetics and devices and hazardous substances

      • Quality and safety
      • Labelling and Packaging
      • Advertising and Sales Promotion
      • Price Tag

    • 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
5. Q. When is the Consumer Act applicable?
     
  A. 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
6. Q. What is consumer product or service?
     
  A. 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.
     
7. Q. What can a consumer do if he has a complaint?
     
  A.

The consumer must do the following:

    • Identify the problem and what you believe would be a fair settlement. Do you want your money back (Refund)? Would you like the product repaired (Repair)? Will exchange do (Replace)?
    • Gather documentation regarding your complaint eg. sales receipts, repair orders, warranties, cancelled checks, or contract which will support the complaint and help the company solve your problem.
    • Go back to where you made the purchase. Contact the person who sold you the item or performed the service. Calmly and accurately explain the problem and what action you would like taken. If that person is not helpful, ask for the supervisor or manager and repeat your complaint. A large percentage of consumer problems are resolved at this level.
    • Write formal letter. If you are not satisfied with the response, write a formal letter of complaint to the consumer protection agency concerned. State your name and address; the name and address of the establishment against whom you are complaining; the circumstances regarding the complaint including names, dates, places, etc. Enclose supporting documents such as official receipts, deed of sale and the like and you should be prepared to make an appearance when called, especially during the mediation conference.
8. Q. What is the period for filing consumer complaints?
     
  A. Within 2 years from the time the consumer transaction was consummated or the deceptive or unfair and unconscionable act or practice was committed, and in case of hidden defects, from discovery thereof.
     
9. Q. Where can a consumer complaint be filed?
     
  A. 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).

10. Q. What are the remedies available to consumers?
     
  A. For Administrative Proceedings:

    • replacement or repair of product or services
    • refund of payment made
    • restitution or rescission of contract
    • reimbursement to complainant of amount spent in pursuing the complaint

For civil/criminal action

    • civil action
    • award of damages
    • replacement or repair of product or services
    • refund of payment made
    • restitution or rescission of contract
    • 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.
11. Q. What are the advantages of filing complaint before the implementing agencies (administrative proceedings)?
     
  A. The advantages are:
    • mediation/arbitration is more economical and time-saving
    • complainant need not undergo the rigors and expense of a court case
12. Q. How are consumer complaints resolved?
     
  A. Complaints are resolved through:
    • The implementing agency where the complaint is filed, after jursidiction 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.
13. Q.

What administrative penalties can be imposed upon establishments found to have violated any of the laws covered by the Consumer Act?

     
  A.

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.
14. Q.

What body coordinates the implementation of the Consumer Act?

     
  A. The National Consumer Affairs Council (NCAC) is the body created by the Consumer Act to improve the management, coordination and effectiveness of consumer programs and policies of the different government agencies and private organizations.
     
15. Q. What is the Compositon of the NCAC?
     
  A. The Council is composed of representatives from the following government and non-government agencies:
    • Department of Trade and Industry
    • Department of Education, Culture and Sports
    • Department of Health
    • Department of Agriculture
    • 4 consumer organizations of nationwide base
    • 2 business/industry sectors
16. Q. What are the powers and functions of the NCAC?
     
  A.

NCAC performs the following functions:

    • Rationalize and coordinate the functions of consumer protection agencies
    • Monitor and evaluate implementation of consumer programs and projects and to take appropriate steps to comply with the established priorities, standards and guidelines
    • Undertake a continuing program on consumer education and information campaign
    • Submit to Congress and the Office of the President, a full report on the progress of the implementation of consumer programs
17. Q. Who heads the NCAC?
     
  A. The Council is headed and presided by a Chairman who is elected by the members. He sets up, with the concurrence of the Council, the policies, procedures and standards to govern the implementation and interpretation of the functions and duties of the Council.

 


   
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