 Receipts: Shall be properly receipted

Consumer Protection Act and Referral Sales

GR: Shall not be used in sale of consumer products
Lemon Law XPN: Seller executes in favor of buyer a written undertaking that will grant
a specified compensation/other benefit to said buyer in return for each
Declaration of Basic Policy:
and every transaction consummated by seller w/ persons referred by
1. Protection against hazards to health and safety; buyer
2. Protection against deceptive, unfair and unconscionable sales
Penalties
acts & practices;
3. Provision of information and education to facilitate sound choice 1. Fine – P5,000 to P10,000;
and proper exercise of right by customer; 2. Imprisonment – not more than 1 year; or
4. Provision of adequate rights and means of redress; and 3. Both
5. Involvement of consumer representatives in formulation of social
and economic policies. LABELING AND FAIR PACKAGING

PROTECTION AGAINST DECEPTIVE, UNFAIR AND Implementing Agency: DTI and other concerned departments
UNCONSCIONABLE SALES ACTS OR PRACTICES Prohibited acts on Labeling and Packaging – to display or distribute
Implementing Agency: Department of Trade and Industry (DTI) in commerce any consumer product whose package/label does not
conform to provisions hereof
 Deceptive Sales Acts or Practices – thru concealment, false
representation of fraudulent manipulation, induces consumer to Shall not apply to persons engaged in business of
enter into sales/lease transaction (violates this Act whether it occurs wholesale/retail distributors, EXCEPT PERSONS:
before, during or after the transaction)
1. Engaged in packaging/labelling of such products
 Unfair/Unconscionable Sales Act or Practice – by taking 2. Prescribe/specify by any means the manner in
advantage of consumer’s physical/mental infirmity, ignorance, which such products are packaged/labelled
illiteracy, lack of time or general conditions of 3. Having knowledge, refuse to disclose the source
environment/surroundings, induces the consumer to enter into of mislabelled/mispackaged products
sales/lease transaction grossly inimical to interests of consumer or
grossly one-sided (violates this Act whether it occurs before, during or
after the transaction) Minimum Labeling Requirements for Consumer Products
Chain Distribution Plans/Pyramid Sales Schemes (recruitment) –  Correct & registered trade name/brand name
shall not be employed in the sale of consumer products  Duly registered trademark
 Duly registered business name
Home Solicitation Sales – not allowed w/o obtaining permit from DTI  Address in the Philippines
 When: Between 9:00 AM and 7:00 PM (other time is allowed  General make/active ingredients
provided the person solicited has agreed)  Net quality of contents (weight, measure or numerical count)
 By whom: Person who has proper identification and authority  Country of manufacture, if imported
from his principal
  If consumer product is manufactured/refilled/repacked under  Identify to whom the warranty is extended;
license from principal, label shall state such fact  Products/parts covered;
 What the warrantor will do in the event of defect, malfunction
Additional Labeling Requirements and at whose expense;
FOOD COSMETICS DRUGS CIGARETTES  What the consumer must do to avail of rights; and
Expiration date Expiration date  Stipulate period within which the warrantor will perform
Whether obligation
consumer 2. Express warranty – shall be operative from the moment of sale
product is semi-  Sales Report (will serve as warranty registration) – all sales
Whether or not it
processed, ready
may be irritant made by distributors shall be reported to manufacturer w/in
to cook, “Warning:
prepared food or Cigarette 30 days from date of purchase
just plain mixture Smoking is  Failure to make/send report – will relieve manufacturer and
Precautions or Dangerous to make the distributor liable for warranty
The Generics Act
Nutritive value contra- Your Health”  Retail – subsidiarily liable under warranty (in case of failure of
shall apply
indications
both distributor and manufacturer)
Whether (with bright red or
ingredients use orange color with 3. Designation of warranties:
are natural or Other labeling black symbol)  Full warranty – meets the minimum requirements
synthetic requirements that  Limited warranty – does not meet the minimum requirements
Other labeling may deem 4. Minimum Standards of Warranties:
requirements that necessary  Remedy w/in reasonable time and w/o charge
may deem
 Permit consumer to elect whether to ask for refund or
necessary
replacement w/o charge where after reasonable number of
attempts to remedy, product continues to have defect or
Penalties malfunction
5. Duration of warranty – (1) stipulation; (2) not less than 60 days nor
 Food/Cosmetic/Drug/Device/Hazardous Substance more than 1 year following sale
1. Fine – P500 to P20,000; 6. Breach of warranty:
2. Imprisonment – 3 months to 2 years; or  Express warranty – consumer may choose:
3. Both a. Repair of product – warranty work must be made w/in 30
 Not any of the above days (may be extended by conditions beyond
1. Fine – P200 to P5,000; warrantor’s control)
2. Imprisonment – 1 month to 1 year; or b. Refund of purchase price – shall be deducted by the
3. Both amount directly attributable to use of consumer prior to
Does not apply discovery of nonconformity
CONSUMER PRODUCT AND SERVICE WARRANTY to professional  Implied warranty – consumer may choose:
services
Implementing Agency: DTI a. Retain goods + damages
b. Reject goods, cancel contract and recover purchase
Additional Provisions of Warranties: price paid + damages
1. Terms of express warranty:
Guaranty of service firms: not less than 90 days (shall be indicated in
 Clear and readily understandable language and clearly
invoices)
identify himself as warrantor;
Penalties PHILIPPINE LEMON LAW (RA 10642 – AN ACT STRENGTHENING
 Any person who shall violate provisions of Art. 67 (conditions and CONSUMER PROTECTION IN THE PURCHASE OF BRAND NEW
warranties governed by Civil Code) MOTOR VEHICLES)
1. Fine – P500 to P5,000;
Lemon law rights period – period during w/c consumer can report any
2. Imprisonment – 3 months to 2 years; or
nonconformity to standards and specifications
3. Both
 Prohibited Acts other than Art. 67 Whichever comes FIRST:
1. Fine – P1,000 to P50,000;
2. Imprisonment – 1 year to 5 years; or  Period ending 12 mos. after date of original
3. Both delivery; OR
 1st 20,000 kilometers of operation after such delivery
Prohibited Acts:
1. Refusal w/o valid legal cause to honor warranty;
Motor vehicle – any self-propelled, four wheeled road vehicle designed
2. Unreasonable delay in honoring warranty;
to carry passengers
3. Removal by any person of product’s warranty card; or
4. False representation as to existence of warranty/guarantee Requisites to invoke Lemon Law rights:
PRICE TAG REQUIREMENT 1. Brand new motor vehicle
2. Purchased in the PH
Manner of placing price tags: must be written clearly, indicating the 3. Reported by consumer to be in nonconformity
price of consumer product per unit in pesos and centavos (shall be no 4. Within the lemon law rights period
erasures/alterations)
Repair Attempts: At any time w/in the Lemon Law rights period and
Small consumer products: after 4 separate repair attempts for the same complaint and the
nonconformity issue remains unresolved, consumer may invoke his rights
Price list placed at nearest point where under this Act
products are displayed may suffice
Warranty Booklet – shall clearly state the manner and form of Notice of
Availment
Penalties (2nd conviction – revocation of business permit & license)
Notice of Availment – in writing:
1. Fine – P200 to P5,000;
2. Imprisonment – 1 month to 6 months; or  Unresolved complaint
3. Both  Consumer’s intention to invoke his rights under this Act

Availment of Lemon Law rights: Subsequent to filing of Notice,

consumer shall bring the vehicle to where it was purchased for final
attempt to address the complaint. If nonconformity issue remains
unresolved, consumer may file complaint before DTI.
Deemed successful repair: If vehicle is not returned for repair w/in 30 - In case nonconformity is not found by DTI, it shall rule in favor
calendar days from date of notice of release following repair attempt of manufacturer and direct consumer to reimburse
w/in Lemon Law rights period (If nonconformity issue still exists after 30- manufacturer the costs incurred by latter in validating
day period but still w/in Lemon Law rights period, consumer may be consumer’s complaints
allowed to invoke his rights). - Appeal may be taken, from final judgment of Adjudication
Officer (AO) w/c completely disposes of case w/in 15 days
Compensation for non-use – consumer shall be provided a reasonable from receipt thereof, on the ff grounds:
daily transportation allowance equivalent to: a. Grave abuse of discretion;
b. Decision is in excess of jurisdiction/authority of AO; and
1. Air-conditioned taxi fare (evidenced by OR);
c. Decision is not supported by evidence or there is serious
2. Amount to be agreed upon by parties; or
error in findings of facts
3. Service vehicle at the option of manufacturer
- Secretary of DTI shall decide on appeal w/in 30 days from
Remedies for Dispute Resolution: receipt thereof. A party seeking further appeal may file a
case for certiorari to Court of Appeals
1. MEDIATION
- DTI shall endeavor to independently establish validity of Disclosures on Resale (only on 1st resale)
consumer’s outstanding complaint
1. Motor vehicle was returned;
- Manufacturer shall be encouraged to settle amicably
2. Nature of conformity w/c caused the return; and
- All disputes submitted shall be settled not later than 10
3. Condition of motor vehicle at the time of transfer to manufacturer
working days from date of filing of complaint w/ DTI
2. ARBITRATION Penalty – minimum amount of P100,000 as damages to aggrieved party
- If there is failure to settle complaint, both parties may
voluntarily decide to undertake arbitration proceedings
3. ADJUDICATION
- In the event both parties do not undertake arbitration
proceedings, at least 1 of the parties may commence
adjudication proceedings
- Adjudication proceedings shall not exceed 20 working days
- In case of finding nonconformity, DTI shall rule in favor of
consumer and direct manufacturer to:
a. Replace motor vehicle; OR
b. Accept return of motor vehicle and pay consumer the
purchase price + collateral charges

Shall be deducted by reasonable allowance for use –

whichever is LOWER:

 20% per annum deduction from PP (depreciation); or

 By using this formula:
Distance travelled (in kms) x PP
100,000 kms