RA 7394

R.A. 7394, is the Consumer Act of the Philippines, which took effect on 15 July 1992.

Q. State briefly the declaration of the Basic Policy.

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

Q. What are the objectives of the Consumer Act?

• Protection of consumer against hazards to health and safety.
• Protection of consumer 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

Q.What government agencies implement the Consumer Act? What are their areas of concern?

• DEPARTMENT OF TRADE AND INDUSTRY (DTI)
  • Consumer Product Quality & Safety
  • Deceptive, unfair and unconscionable sales act and practices
  • Weights and measures (metrication)
  • Consumer Products and Service Warranties
  • Price Tag
  • Labeling and Packaging
  • Liability foe Products and Services
  • Services and repair shops
  • Advertising and sales promotion
• Department of Agriculture (DA)
  • Agricultural Products
    • Quality and safety
    • Labeling and packaging
• Department of Education, Culture and Sports (DECS)
  • Consumer education and information
• Department of Health (DOH)
  • Food, drugs, cosmetics and devices and hazardous substance
    • Quality and safety
    • Labeling and Packaging
    • Advertising and Sales Promotion
    • Price Tag
• Bangko Sentral ng Pilipinas (BSP)
  • Consumer Credit Transactions extended by banks and other financial intermediaries
• Securities & Exchange Commission (SEC)
  • Credit facilities extended to consumer by financing companies

Q. When is the Consumer Act applicable?

• If the COMPLAINT is a natural person;
• If the SUBJECT of the violation is a consumer product or service; and
• If the NATURE of the complaint is regarding any of the aforementioned concerns

Q. What is a consumer product or service?

Consumer product or service means goods, service credits, debts or obligations which are primarily for personal, family, household or agricultural purpose, which shall include, bur not limited to food, drugs, cosmetics and devices.

Q. What can the consumer do if he has a complaint?

• Identify the problem -Identify the problem and what you believe would be a fair settlement.
  • Do you want you money back? (Refund)
  • Would you want the product repaired? (Repair)
  • Will Exchange do ? (Replace)
• Gather documentation -Gather documentation which will support the complaint and help the company solve your problem.
  • Sales receipt
  • repair orders
  • warranties
  • cancelled checks
  • contract
• Return to the establishment where you made the purchase – Contact the person who sold you the item or performed the service. Calmly and accurately explain the problem and the 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 a 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 the address of the establishment which the complaint is directed, the circumstances regarding the complaint including names, dates, places etc. Enclose supporting documents such as official receipts, deed of sale and the likes. Be prepared to make an appearance when called, especially during the mediation conference

Q. What is the period for filing consumer complaints?

Within two (2) years from the time the consumer transaction was consummated or the deceptive or unfair and unconscionable act or practice was committed. In case of hidden defects, from discovery thereof.

Q.Where can a consumer complaint be filed?

The administrative complaint shall be filed in the duplicate with the Provincial Office of the Department 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 case where the complainant and respondent are situate in deferent provinces, the complainant has the option to choose the place where to file the complaint.

In the National Capital Region, the complaints shall be filed in the following offices:

• For the Department of trade & Industry, DTI-NCR
• For the Department of Health, BFAD
• For the Department of Agriculture, Legal Dept. DA

The civil/ criminal action shall be filed with the appropriate regular courts ( Municipal Trial Court / Regional Trial Court)

Q. What remedies are available to the consumers?

A. For Administrative proceedings:

• Replacement or repair of product or services
• Refund of payment made
• Restitution or rescission of contract
• Reimpursement to complainant of amount spent in pursuing the complaint

B. For civil / criminal action :

• Civil action
• Award of damages
• Replacement or repair of product or service
• Refund of payment made
• Restitution or rescission of contract
• Reimbursement to complainant of amount spent in pursuing the complaint
• Criminal action - defendant, if found quilty by the court be sentenced to imprisonment or payment of the fine or both, at the discretion of the court.

Q. What are the disadvantages of filing the complaint before the Implementing Agencies (Administrative Proceedings)

• Mediation / arbitration is more economical and time–saving.
• Complainant need not undergo the rigors and expense of a court case

Q. How are consumer complaints resolved?

• 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 of 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 errorin findings of facts.

Q. What administrative penalties can be imposed upon establishments that are found to have violated any of the laws covered by the consumer act?

• The issuance of a cease and desist order. Provided however, that such order shall specify the acts that the 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 compliant 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 and answer any damages or injury that may arise from the continued use of the product;
• The imposition 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 or not more than One Thousand Pesos (P1,000.00) for each day of continuing violation.