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1.
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Q.
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What is the policy of the state on deceptive,
unfair and unconscionable sales acts or practices? |
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A.
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It
is the policy of the State to promote and encourage fair, honest
and equitable relations among parties in consumer transactions
and protect the consumer against deceptive, unfair and unconscionable
sales acts or practices. |
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2.
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Q.
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Which
government agency implements the provision of the consumer act
on deceptive, unfair, and unconscionable sales acts or practices? |
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A.
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The
department of Trade and Industry. |
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3.
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Q.
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When
is a sales act considered deceptive? |
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A.
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A sales act or practice is considered deceptive whenever the
producer, manufacturer,supplier or seller, or owner or operator
of a consumer service or repair firm throughconcealment, false
representation or fraudulent manipulation, induces a consumer
to enter into a sales or lease transaction of any consumer
product or service.
Without
limiting the scope of the above paragraph, certain salesn
acts and practices are considered deceptive when it is represented
that a consumer product or service :
- has
a sponsorship or approval of a body or a person which
it does not have;
- has
the performance, characteristic, ingredients, accessories,
uses or benefits it does not have ;
- has
a particular standard, quality, grade, style or model
when it fact it is not;
- is
new, original or unused, when in fact, it is in a deteriorated,
altered, reconditioned, reclaimed or second-hand state;
- is
available to the consumer for a reason that is different
from the fact;
- has
been supplied in accordance with the previous representation
when in fact it is not;
- can
be supplied in a quantity greater than the supplier intends;
- needed
a service or repair when in fact it does not;
- has
a specific price advantage when in fact it does not;
- involves
or does not involves a warranty, a discalimer of warranties,
particular warranty terms or other rights, remedies or
oblogations if the indication is false;
- the
seller or supplier has a sponsorship, approval, or a ffiliation
he does not have.
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4.
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Q.
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What
id the coverage of the rules on deceptive, unfair, and unconscionable
sales acts or practices? |
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A.
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These
rules shall apply to acts and practices in the sale or lease
of any consumer product and in the availment of any consumer
service.
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5.
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Q.
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When
does a deceptive, unfair or unconscionable sales act or practice
violate the consumer act? |
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A.
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A
deceptive sales act or practice by a seller or supplier in connection
with a consumer transaction violates the Consumer Acr whether
it occurs before, during or after the transaction. |
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6.
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Q.
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What
is the prohibition on the use of the words " No Return,
No Exchange"? |
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A.
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The words " No Return, No Exchange " , or words to
such effects sahll not be written into the contract of sale
or receipt in a sales transaction, in any document evidencing
such sale or anywhere in a store establishment. |
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7.
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Q.
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Why is the presence of a "No Return, No
Exchange " notice considered deceptive? |
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A:
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The " No Return, No Exchange " notice is considered
deceptive because it creates a misconception on the part of
the consumers that they do not have the right to return shoddy
or defective goods or demand for remedies in case of defective
or imperfect service. On the contrary, consumers may return
or exchange the goods or avail of other renedies in case of
hidden faults or defects, or any charge not known to the buyer.
By provision of law, sellers are obliged to honor their implied
warranties and grant corresponding remedies to consumers. |
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8.
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Q.
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Cite
other sales acts and practices which are considered deceptive
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A:
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- Deceptive
Presentation of Consumer Products
- the appearance of consumer products shall not be reasonably
enhanced as to deceive consumers on their true characteristics
or condition.
- Deceptive
Demonstration of Performance of Consumer products, Services
- fraudulent tricks or machnations sahll not be employed
in the demonstration of the performance of a consumer product
or service.
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9.
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Q.
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What
is unfair or Unconscionable sales act or practice?
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A.
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An
act or practice of the producer, manufacturer, seller or supplier
of a consumer product or the owner or operator of a consumer
service or repair firm of inducing, or enticing a consumer to
enter into a sales or lease transaction of a consumer product
or to avail of its services grossly inimical to his interests
or grossly one-sided in favor of the producer manufacturer,
distributor, supplier or seller, owner or operator, by taking
advantage of the consumer's physical or mental infirmity, ignorance
, illiteracy, lack of time of the general conditions of the
environment or surroundings. |
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10.
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Q.
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What are the circumstances to be considered
in determining unfair and unconscionable sales acts and practices? |
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A:
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The following circumstances shall be considered :
- That
the producer, manufacturer, distributor, supplier or seller
took advantage of the inability of the inability of the
consumer to reasonably protect his interest because of difficulty
to understand the language of an agreement or similar factors;
- That
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 consumer;
- That
when the consumer transaction was enteredinto, the consumer
was unable to receive a substantial benefit from the subject
of the transaction;
- That
when the consumer transaction was entered into, the seller
or supplier was aware that there was no reasonable probaility
of payment of the obligation in full by the consumer;
- That
the transaction that the seller or supplier induced the
consumer to enter into was excessively one-sided in favor
of the seller or supplier.
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| On
Direct Marketing |
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11.
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Q:
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What is Direct Marketing? |
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A:
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Direct
marketing is the sale of consumer products or services by mail,
telephone, any form of telecommunications, message delivery
service or like facilities or through, any form of mass media
but shall not include general advertising. |
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12.
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Q:
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What are the requirements for Direct Marketing? |
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A:
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The following data shall be indicated in the solicitations
or communications sent or made to a prospective buyer :
- The
business name and address of the seller, lessor or operator,
where purchases or orders are to be made to a post office
box address, the name and address of the seller, lessor
, or operator shall nevertheless be indicated;
- If
it is a consumer product that is offered for sale or lease,
all the mandatory requirements of product labeling, should
be indicated;
- A photograph,
picture, illustration or detailed description of the product
or service;
- The
terms and conditions of sale or lease of the product or
availment of the service;
- A statement
that order may be canceled before or upon delivery in the
event that the product is not in conformity with representation
in the solicitation or communication;
- The
manner and schedule of payment.
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| On
Sale By Sample |
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13.
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Q.
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What
is sale by sample? |
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A:
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sale
by sample is a sale or lease of consumer products whereby the
prospective buyer or lessor is only able to insepct or examine
a consumer product for sale through an example , model, prototype
of the consumer product or a specimen from among several units
being sold in stes or bulk. |
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14.
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Q.
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What is the rule on sale by sample? |
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A:
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The
sample used in the selling of any consumer product or service
shall be essentially the same as the consumer product or service
being sold. |
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| On
Sale By Description |
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15.
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Q.
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What is sale by description? |
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A:
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Sale
by description is the sale or lease of a consumer product or
service whereby the only inducement is through a description
of the product or service either verbally or through any form
of literature. |
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16.
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Q.
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What is the rule on sale by description? |
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A:
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The description of any consumer product or service for sale
shall be accurate and shall indicate all the essential features
of such product or service. |
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| On
Negative Option Plan |
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17.
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Q.
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What is a negative option plan? |
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A:
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Negative option plan refers to a sales scheme whereby a consumer
product or a description thereof is sent to a consumer and considered
sold to him unless the consumer notifies the seller of his intention
not to buy the product or to buy another product offered as
alternative thereto. Thus , it shall not be used in the sale
or lease of consumer products. The consumer shall be under no
obligation to pay or return products sent to him under a negative
option plan. |
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18.
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Q.
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When may negative option plans be allowed as
an exception to the rule? |
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A:
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Negative option plans may be allowed in the following instances:
- If
a prior written agreement for the purpose had been entered
by the seller or lessor and the buyer or lessee;
- If
such agreement is part of a prior subscription agreement
between the seller or lessor and the buyer or lessee;
- In
the case of clubs or organizations where such plan is an
accepted ordinary practice and a member thereof has signified
agreement to it in writing.
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19.
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Q.
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What
are the required stipulations in a negative option plan under
the exception?
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A:
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Any agreement or offer or solicitation to enter into agreement
to engage into a negative option plan under the exceptions
provided that such shall contain stipulations as top the following:
- nature
and duration of the plan;
- intervals
at which the products will be sent to the buyer;
- manner
by which a buyer may inform the seller that he does not
wish to buy or lease a selection or offer made;
- how
the buyer may be billed or how the selection may be paid;
- whether
billing charges include shipping and handling;
- statement
that the buyer may decide within a specific time which shall
not be less than thirty days from the date of receipt of
the selection or offer.
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| On
Referrals Sales |
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20.
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Q.
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What is referral sales? |
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A:
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Referral sale means the sale or lease of a consumer product
or service to a buyer reffered by another buyer for a consideration,
whether for a fee or some other benefit. It shall not be used
in the sale of consumer products unless the seller excutes in
favor of the buyer a written undertaking that will grant a specified
compensation or other benefit to said buyer in return for each
and every transaction consummated by the said seller with the
persons referred by said buyer of for subsequent sales that
said buyer has helped the seller enter into. |
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| On
Lay-Away Plan |
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21.
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Q.
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What
is a Lay-away plan? |
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A:
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A
Lay-away plan means a consumer credit transaction whereby the
buyer of a consumer product is allowed to pay by installment
or at a future day wheter or not a reservation fee is required,
provided that the possession and ownership of the product remains
with the seller until full payment at the time agreed upon. |
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22.
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Q.
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What is the rule on Lay-away plan? |
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A: Where consumer products are sold through a lay-away plan,
the selller shall provide the buyer with a written and signed
document describing in detail the consumer product, price and
terms of payment, subject of transaction. Failure of the buyer
to pay the full amount of the product or where the seller fails
to deliver the same upon full payment as when it is lost, altered,
changed, or substituted while in the custody of the seller,
the rights and remedies of the parties shall be gorverned by
the Civil Code of the Philippines. |
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| On
Sale By Vending Machines |
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23.
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Q.
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What is the rule on sale by vending machines? |
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A:
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Where consumer products are sold through vending machines or
like machines which the buyer himself has to operate, the name
and business address of the owner or operator of such vending
machine shall be posted in a conspicuous place therein. |
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| On
Home Solicitation Sale |
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24.
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Q.
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What is Home solicitation sale? |
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A:
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home solicitation sale means consumer sales or leases which
are personally solicited by any person, organization through
person to person contact at the buyer's residence, place of
work, at the seller's transient quarters or at any appointed
place, except the seller or lessor's usual place of business. |
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25.
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Q.
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What is the basic rule in conducting Home solicitation
sale? |
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A:
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A business entity sahll obatin first a permit form the Department
of Trade and Industry before conducting any home solicitation
sales of any consumer product or service. Moreover, a business
entity applying for a permit in behalf of all other business
entities acting as its agents conducting home solicitation sale
for the applicant whether or not such agents are independent
business entities or are also conducting home solicitation sales
for other consumer products. |
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26.
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Q.
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Where
are applications for permit filed? |
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A.
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- If
the home solicitation sale is to be conducted within a single
province, the application shall be filed with the Department's
provincial office , or in the absence of such an office,
with the Department's regional office which has jurisdiction
over such province;
- If
the home solicitation sale is to be conducted within several
provinces within a single region, the application shall
be filed with the Department's regional office which has
jurisdiction over said provinces;
- If
the home solicitation sale is to be conducted nationwide,
only within the National Capital Region, or in several including
Metro Manila, the application shall be filed with the Department's
regional office in the National Capital Region (NCR);
- For
home solicitation sales covering more than one region but
excluding Metro Manila, the application sahll be filed with
the Department's regional office where the main office of
the business entity is located.
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27.
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Q.
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When
can home solicitation sales be conducted? |
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A:
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home
solicitation sale s may be conducted by a person who has the
proper identification and authority from his principal to make
such solicitations. |
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28.
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Q.
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Are receipts needed for home solicitation sales? |
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A:
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Yes.
All sales generated from home solicitation sales shall be
properly receipted as per existing laws, rules and regulations
on sale transactions.
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29.
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Q.
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What are the prohibited representation in conducting
home solicitation sales? |
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A:
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Except
where such is actually the case, it shall not be represented
in a home solicitation sale that:
- the
buyer has been especially selected;
- a survey,
test or research is being conducted;
- the
seller is making a special offer to a few persons only for
a limited period of time.
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30.
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Q.
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Is
disclosure of criteria employed in selection of prospective
buyer in a home solicitation sale required?
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A.
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Yes, if the seller or supplier claimed that a specific consumer
has been chosen from among a number of other consumers, and
such selection had actually been made, the criteria used in
the selection should be disclosed to the chosen consumer. |
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31.
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Q.
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What
are the rules on consumer sevice firms? |
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A:
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the
following are the rules on consumer service firms:
- Representation
as to Availability of Certain Facilities or Amenities:
- Any
service firm engaged in the provision of consumer services
shall not represent that it has a certain facility and/or
amenity unless the same is actually available to the
consumer and in good working condition. However, if
any of the facilities and amenities usually advertised
are out-of-order, the consumers availing of the services
of the service firm shall be informed of such facts'
before any consumer transaction is entered into. If
within the duration of a consumer transaction, such
facility or amenity falls into disrepair, the same shall,
if practicable, be repaired or serviced at once. Provided,
that the consumer shall also have the option to terminate
the contract or service and receive a corresponding
refund of payments already made.
- Display
of Lincense to Operate Consumer service Firm
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Consumer service firms required by any law or regulation
to acquire a lincense to operate shall secure the same
and shall exhibit such lincense in its place of business.
- Damage
or injury caused by service firm
- Any
repair for damage or injury caused by the service firm
shall be paid for by the service firm whether or not
the repair is undertaken by it or anothe firm. The buyer
availing of the services of the service firm shall also
be reimbursed of the fees paid for the services of the
service firm responsible for the damage or injury .
In case of loss of any property of the buyer due to
the fault of the service firm, the buyer shall be reimbursed
of its fair market value at the time of injury or damage.
- Acquisition
of an insurance policy
- Consumer
service firms required by any law or regulation to acquire
an insurance for damages, injuries or loss due to its
operations shall acquire the same and make the insurance
policy accessible to the Department and to any buyer
upon reasonable request.
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32.
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Q.
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What are the additional rules on consumer repair
and service firms for electrical appliances, electronic equipment
and motor vehicles? |
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