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:

o Protection of consumers against hazards to health and safety;

o Protection of consumers against deceptive, unfair and unconscionable sales
acts and practices;
o Provision of information and education to facilitate sound choice and the
proper exercise of rights by the consumer;
o Provision of adequate rights and means of redress;
o 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:

o Department of Trade and Industry (DTI)

o Consumer Product Quality and Safety
o Deceptive, unfair and unconscionable sales acts and practices
o Weights and measures (metrication)
o Consumer Products and Service Warranties
o Price Tag
o Labeling and Packaging
o Liability for Products and Services
o Service and repair shops
o Advertising and sales promotion
o Department of Agriculture (DA)
o Agricultural Products
 Quality and Safety
 Labelling and Packaging
o Department of Education, Culture and Sports (DECS)
 Consumer education and information
o Department of Health (DOH)
o Food, drugs, cosmetics and devices and hazardous substances
 Quality and safety
 Labelling and Packaging
 Advertising and Sales Promotion
 Price Tag
o Bangko Sentral ng Pilipinas (BSP)
 Consumer credit transactions extended by banks and other financial
intermediaries
o 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:

o the COMPLAINANT is a natural person;

o the SUBJECT of the violation is a consumer product or service; and
o 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:

o 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)?
o 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.
o 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.
o 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:

o replacement or repair of product or services

o refund of payment made
o restitution or rescission of contract
o reimbursement to complainant of amount spent in pursuing the complaint

For civil/criminal action

o civil action
o award of damages
 o replacement or repair of product or services
o refund of payment made
o restitution or rescission of contract
o reimbursement to complainant of amount spent in pursuing the complaint
o 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:

o mediation/arbitration is more economical and time-saving

o complainant need not undergo the rigors and expense of a court case

12. Q. How are consumer complaints resolved?

A. Complaints are resolved through:

o 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.
o 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.
o Formal hearing will be conducted by the Arbitration Officer and decision will
be rendered.
o Decision of the Arbitration Officer is appealable to the Secretary of the
concerned Department within 15 days from receipt of the decision.
o 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:
o There is grave abuse of discretion.
o The decision rendered was in excess of jurisdiction or authority of the
Arbitration Officer
o 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:

o 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;
o 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:
o an assurance to comply with the provisions of this Act and its implementing
rules and regulations;
o an assurance to refrain from engaging in unlawful acts and practices or
unethical trade practices subject of the formal investigation;
o an assurance to comply with the terms and conditions specified in the
consumer transaction subject of the complaint;
o an assurance to recall, replace, repair or refund the money value of
defective products distributed in commerce;
o 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.
o Restitution or rescission of the contract without damages;
o 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;
o 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:

o Department of Trade and Industry

o Department of Education, Culture and Sports
o Department of Health
o Department of Agriculture
o 4 consumer organizations of nationwide base
o 2 business/industry sectors

16. Q. What are the powers and functions of the NCAC?

 A. NCAC performs the following functions:

o Rationalize and coordinate the functions of consumer protection agencies

o Monitor and evaluate implementation of consumer programs and projects
and to take appropriate steps to comply with the established priorities,
standards and guidelines
o Undertake a continuing program on consumer education and information
campaign
o 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.
The Eight (8) Basic Consumer Rights
1. THE RIGHT TO BASIC NEEDS

The first consumer right is THE RIGHT TO BASIC NEEDS which guarantee survival, adequate food,
clothing, shelter, health care, education and sanitation.

YOU MAY LOOK FORWARD TO:

The availability of basic and prime commodities to consumers at affordable prices and of good quality.
WHAT TO DO:
o Prioritize your needs
o Look for quality, not quantity
o Be quality conscious, not brand conscious
o Do not engage in panic-buying
o In times of crisis/calamity, be vigilant in ensuring that basic commodities are available in
the market

IF YOU ARE NOT SATISFIED:

 Keep in mind that the highest-priced or most expensive product in the market may not
necessarily be the best in quality
 Be vigilant in ensuring your continuous access to a wide assortment of competitively-
priced goods and services
 Ensure also that in times of crisis, the prices of commodities do not increase exorbitantly

2. THE RIGHT TO SAFETY

The second consumer right is THE RIGHT TO SAFETY which is the right to be protected against the
marketing of goods or the provision of services that are hazardous to health and life.
YOU MAY LOOK FORWARD TO:

 Manufacturers of consumer products to undertake extensive safety and performance

testing before selling their products in the market
 Labels which contains the proper information as regards the product, its use and how to
operate it, if the need arises, and also precautions or warning signs.

WHAT TO DO:
  If you have sensitivity to a certain ingredient, it would be very beneficial if you read all
labels and product circulars before using a certain product
 If you are in a store and have doubts about the product's effectiveness, ask for a person
who knows how the products works or how to operate
 Keep certain products out of the reach of young children. Watch out for special warning
signs in the label of the product like "NOT SUITED FOR CHILDREN BELOW FOUR(4)
YEARS" or "POISON: For external use only etc."
 Before buying products especially in cases when only large containers are available, it
would be best if you ask for a sample or tester
 Be on guard regarding products which are found to be hazardous, you can scan
newspapers regularly for new bits on this topic

IF YOU ARE NOT SATISFIED:

 If no one in the store can explain to you satisfactorily things about the product, try to
contact the manufacturer and give the pertinent details needed in determining the product
easily such as code numbers and date of purchase for easy product identification
 If you have doubts about the safety or proper performance of a product, go back to the
store with your official receipt. To save time, jot down your questions.

3. THE RIGHT TO INFORMATION

The third consumer right is THE RIGHT TO INFORMATION which is the right to be protected against
dishonest or misleading advertising or labelling and the right to be given the facts and information needed
to make an informed choice.
YOU MAY LOOK FORWARD TO:
 A complete information about the product to be purchased including its use, ingredients/
chemical contents, precautions, if any, limitations and expiry date

WHAT TO DO:
 Before purchasing a product, it is very important for you to read the label carefully so that
you would be able to know its use, content (chemical ingredients), number of pieces, how
to care for the product
 Before signing any document like warranties and guarantees, credit items or services
contacts, it is important to read and understand all provisions in the documents especially
the fine prints
 It is very important to read newspapers, buying guides, magazines before purchasing a
product. Also, consult with friends who you know have purchased a similar product
 If you need to clarify something regarding the use of the product, don't hesitate to write
the company so that you can obtain a detailed information
 It is imperative to look for the name and address of the manufacturer in case the need
arises.

IF YOU ARE NOT SATISFIED:

 It would be advisable to contact the manufacturer directly to give you detailed
information.

4. THE RIGHT TO CHOOSE

The fourth consumer right is THE RIGHT TO CHOOSE which is the right to choose products at
competitive prices with an assurance of satisfactory quality.
YOU MAY LOOK FORWARD TO :
 A wide arrays of goods and services which are offered in the market with diverse brands,
 sizes, shapes and colors and with differences in the price, quality and use.

WHAT TO DO:
 Specify what you really want. The biggest size may be cheaper but it may not be what
you need.
 Canvass price before purchasing a product or signing a contract.
 Read the manuals or instructions carefully to be able to compare one product with
another because in this way, you will not miss the fine prints which might contain the
information you need to determine which product would serve you better.
 If product tester are available, be sure to try one.
 Be wary of special offers like free items or buy 2 take 1 free. Compare them with the
regular priced items to be sure that you are not paying for the said free items.

IF YOU ARE NOT SATISFIED:

 Get in touch with the store owner / manufacturer in case you have a query regarding the
product.
 As regards services rendered, you may write the manager of the company and suggest
ways in which to improve their service.

5. THE RIGHT TO REPRESENTATION

The fifth consumer right is THE RIGHT TO REPRESENTATION which is the right to express consumer
interests in the making and execution of government policies.

YOU MAY LOOK FORWARD TO:

 Legislators would propose laws that would ensure that consumers would have the
chance to live a better life by getting the best value for their hard-earned peso.

WHAT TO DO:
 Read newspapers, bulletin boards in private and government offices, especially in your
locality for announcements of public hearings
 Take time to attend public hearings or even meetings conducted in your area wherein
consumer issues are being discussed.
 Be aware of how the consumer laws and regulations are being implemented in your
locality.

IF YOU ARE NOT SATISFIED:

 Write a letter to your barangay chairman, especially if the issue concerns your locality.
The barangay chairman is in the best position to recommend your proposal to the
council.
 Be a member of the consumer group because there is strength in number and your
collective voices will be heard loud and clear.

6. THE RIGHT TO REDRESS

The sixth consumer right is THE RIGHT TO REDRESS which is the right to be compensated for
misrepresentation, shoddy goods or unsatisfactory services.
YOU MAY LOOK FORWARD TO:
Manufacturers / Storeowners would replace defective goods pursuant to the provision on "No Return, No
Exchange" provided in the Implementing Rules and Regulations of Republic Act 7394, otherwise known
as the Consumer Act of the Philippines
WHAT TO DO:
  In case you bought a defective product, try going back to the store where you bought the
item and look for the Consumer Welfare Desk.
 You may request a replacement, refund or if needed, have the defective item repaired.
 If the manager or store representative does not act on your complaint, proceed to the
agency which has jurisdiction over your case.
 Bring the necessary documents like complaint letter and a copy of your receipt and other
documents you deem are vital for the mediation.
 Be sure to attend the mediation conference.

IF YOU ARE NOT SATISFIED:

 If mediation fails, arbitration follows. * The process used is similar to the process being
implemented by the regular courts. You will be duly informed of the developments of your
case.

* On the first day of the hearing, the Consumer Arbitration Officer (CAO) shall talk to the parties for a last
attempt to mediate / conciliate the complaint. If no settlement is reached, a formal hearing will be
conducted. The CAO shall resolve the complaint after formal hearing. The Decision of the Consumer
Arbitration Officer becomes final and executory unless appealed to the Department Secretary concerned
within 15 days from receipt of such order.

(REFERENCE: JOINT DTI, DOH, DA ADMINISTRATIVE ORDER #1, SERIES OF 1993)

7. THE RIGHT TO CONSUMER EDUCATION
The seventh consumer right is THE RIGHT TO CONSUMER EDUCATION which is the right to acquire
the knowledge and skills necessary to be an informed customer.

 The three sectors of society: business, government and consumer would embark on an
information campaign through tri-media on consumer-related issues.
 A series of seminars, conferences, fora, trainings, and public hearing for the welfare of
consumers.
 Consumer Education being integrated in the school curriculum from elementary,
secondary and tertiary level as mandated by Republic Act 7394, otherwise known as the
Consumer act of the Philippines.

WHAT TO DO:
 Scan newspapers, magazines and other reading materials for articles or newsbits which
educate consumers on how to get the best value for their peso.
 Involve yourself in public hearings or even meetings conducted in your area wherein
consumer -related issues such as access to basic goods and services, product quality
and safety, sustainable consumption and the like are being discussed.
 Participate in seminars, conferences and fora conducted by government agencies,
consumer groups and business / industry sector regarding news and regulations for
consumer welfare.

IF YOU ARE NOT SATISFIED:

 Write a letter to consumer columnists to share your opinions regarding a consumer issue.
 Companies have consumer departments and department stores have consumer welfare
desks wherein you can inquire on additional information regarding a product or share
your views on goods and services that they are offering.
 Inquire about the consumer education activities being undertaken by the schools.
 Inform government officials in writing on issues or legislation that you think will greatly
affect you as consumer.
8. THE RIGHT TO A HEALTHY ENVIRONMENT

The eight consumer right is THE RIGHT TO A HEALTHY ENVIRONMENT which is the right to live and
work in an environment which is neither threatening nor dangerous and which permits a life of dignity and
well-being.

YOU MAY LOOK FORWARD TO:

 The government exerting an iron hand regarding the alarming increase in the degradation
of the environment especially our forests, dying wildlife, depleted land fill space and
environmental contamination to prevent further damage
 Constant monitoring of our seas, coral reefs, forest, and waste disposal being committed
by factories to check if there is a violation of the laws on environmental protection.

WHAT TO DO:
 Be aware of the kind and extent of pollution occuring in your locality like air polluton,
noise / odor etc. so that you would be able to address the problem
 Do your share in caring for our environment by practicing the 3R's of environmental
protection:
* REDUCE - the source of solid wastes by buying earth friendly products. These are
products that could be disposed properly without harming our environment.
* REUSE - products and containers as much as possible.
* RECYCLE - because using recycled products and recycling per use, will prolong the life
of our landfills

IF YOU ARE NOT SATISFIED:

 Write to the local officials and to consumer organizations if you are aware of dynamite
fishing or illegal logging being committed in your area.
 Organize an earth-friendly group in your area. The main task of which is to ensure that
your surroundings have clean air and clean water. Also, encourage the people in your
neighborhood to practice proper waste disposal, use of recycled and recycled materials
and the use of environmentally safe materials.

1. Q. What is the policy of the state on deceptive, unfair and unconscionable sales acts or
practices?
A. 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.
2. Q. Which government agency implements the provision of the consumer act on deceptive,
unfair, and unconscionable sales acts or practices?
A. The department of Trade and Industry.
3. Q. When is a sales act considered deceptive?
 A.

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 :

o has a sponsorship or approval of a body or a person which it does not

have;
o has the performance, characteristic, ingredients, accessories, uses or
benefits it does not have ;
o has a particular standard, quality, grade, style or model when it fact it is
not;
o is new, original or unused, when in fact, it is in a deteriorated, altered,
reconditioned, reclaimed or second-hand state;
o is available to the consumer for a reason that is different from the fact;
o has been supplied in accordance with the previous representation when in
fact it is not;
o can be supplied in a quantity greater than the supplier intends;
o needed a service or repair when in fact it does not;
o has a specific price advantage when in fact it does not;
o 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;
o the seller or supplier has a sponsorship, approval, or a ffiliation he does
not have.

4. Q. What id the coverage of the rules on deceptive, unfair, and unconscionable sales acts or
practices?
A. 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.
5. Q. When does a deceptive, unfair or unconscionable sales act or practice violate the
consumer act?
A. 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.
6. Q. What is the prohibition on the use of the words " No Return, No Exchange"?
A. 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.
7. Q. Why is the presence of a "No Return, No Exchange " notice considered deceptive?
A: 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.
8. Q. Cite other sales acts and practices which are considered deceptive ?
A:  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.

9. Q. What is unfair or Unconscionable sales act or practice?

A. 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.
10. Q. What are the circumstances to be considered in determining unfair and unconscionable
sales acts and practices?

A: 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.

On Direct Marketing

11. Q: What is Direct Marketing?

A: 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.

12. Q: What are the requirements for Direct Marketing?

A: 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.

On Sale By Sample

13. Q. What is sale by sample?

A: 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.

14. Q. What is the rule on sale by sample?

A: 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.

On Sale By Description

15. Q. What is sale by description?

A: 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.

16. Q. What is the rule on sale by description?

A: 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.

On Negative Option Plan

17. Q. What is a negative option plan?

A: 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.

18. Q. When may negative option plans be allowed as an exception to the rule?

A: 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.

19. Q. What are the required stipulations in a negative option plan under the exception?

A: 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.

On Referrals Sales

20. Q. What is referral sales?

A: 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.

On Lay-Away Plan

21. Q. What is a Lay-away plan?

A: 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.

22. Q. What is the rule on Lay-away plan?

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.

On Sale By Vending Machines

23. Q. What is the rule on sale by vending machines?

A: 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.

On Home Solicitation Sale

24. Q. What is Home solicitation sale?

A: 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.

25. Q. What is the basic rule in conducting Home solicitation sale?

A: 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.

26. Q. Where are applications for permit filed?

A.  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.

27. Q. When can home solicitation sales be conducted?

A: home solicitation sale s may be conducted by a person who has the proper identification
and authority from his principal to make such solicitations.

28. Q. Are receipts needed for home solicitation sales?

A: Yes. All sales generated from home solicitation sales shall be properly receipted as per
existing laws, rules and regulations on sale transactions.

29. Q. What are the prohibited representation in conducting home solicitation sales?

A: 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.

30. Q. Is disclosure of criteria employed in selection of prospective buyer in a home solicitation

sale required?

A. 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.

31. Q. What are the rules on consumer sevice firms?

A: the following are the rules on consumer service firms:

 Representation as to Availability of Certain Facilities or Amenities:

o 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

o 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

o 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

o 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.
32. Q. What are the additional rules on consumer repair and service firms for electrical
appliances, electronic equipment and motor vehicles?

A: before undertaking any repair or servicing of a common product, the owner shall be
informed by the repair of service firm of the following:

 Results of the examination, assessment or evaluation of the nature and extent of

the damage of the consumer product
 Nature and extent of repair or servicing necessitated by the damage
 Whether a part of the product need be replaced or a new one installed
 Inclusive dates within which the repair or servicing will be done and where
applicable, the existence of a penalty clause
 An estimate of how long the repair or service work done and the specific aspects
of work guaranteed such as parts, labor, the job as a whole, its extent and duration
 Itemized and total amount to be paid for the repair or servicing of the product,
separating labor charges for parts or accessories used
 Form and schedule of payments for the work to be done
 In cases of electrical, mechanical, and electronic consumer products, the foregoing
disclosures shall be in writing.

33. Q. Is a downpayment required for repair services?

A: Yes, however, downpayment shall not exceed fifty percent (50%) of the total cost of such
service except where spare parts or materials have to be procured before any repair
service can be done and such materials are identified and are for the account of the
consumer.

34. Q. Should the owner be informed in case further damages were discovered?

A: Generally, repair or servicing of a consumer product shall be confined to the results of the
examination or assessment. Thus, if other damages would be discovered in the course of
the repair or service, the owner should be informed first of such damage and the price of
such additional work before any repair or servicing would be done.

35. Q. Can the repairman change any of the parts without informing the owner?

A: No replacements or change in any parts shall be made without the knowledge and prior
consent of the owner. Moreover, owners should also be informed if the parts are available
in the market. In case it is only available in the repair and service firm, the name, brand
and price of the same shall be made known to the consumer prior to the actual reapir or
servicing.

36. Q. Who will shoulder the cost of repair in case it was further damaged during the repair?

A: The repair or service firm shall shoulder the cost of repair of the consumer product for
damages caused by it whether or not the repair is to be undertaken by another firm.

37. Q. What should be included in the receipt for a product that has been repaired?

A: The repair for the services of a repair or service firm shall contain an itemized statement of
account showing the amount for the service or repair and for the parts installed. The nature
and extent of the repair or service shall also be indicated in the receipt or any
accompanying document.

38. Q. What are the sanctions under the Consumer act (RA 7394)?
 A:

CRIMINAL SANCTION:

a.) Any person who shall violate the provisions of Title III, Chapter I, shall upon conviction,
be subject to a fine of not less than Five Hundred pesos (P500.00) but not more than Ten
Thousand pesos (P10,000.00) or imprisonment of not less than five (5) months but not
more than one (1) year or both, upon the discretion of the court.

b.) In addition to the penalty provided for in paragraph (a), the court may grant an
injunction restraining the conduct constituting the contavention of the provisions of Articls
50 and 51 (Prohibition Against Deceptive Sales Acts and Practices) and/or actual damages
and such other orders as it thinks fit to redress injury to the person caused by such
conduct.

ADMINISTRATIVE SANCTION:

a.) The issuance of a cease and desist order.

b.) The acceptance of a voluntary assurance of compliance or discontinuance from the
respondent.
c.) Restitution or rescission of the contract without damages.
d.) Imposition of administrative fines ranging from P500 to P300,000.
1. Q. What is dumping and when does it occur ?

A: Dumping is an unfair trade practice that occurs when a product or merchandise is imported
into the country. To be considered dumping two conditions must be met: (a) the price of
the imported item or merchandise is less than its normal value in the country where it
comes from; and (b) the imported goods can cause harm or impede the establishment of
the domestic or local industry making the same or similar article.

2. Q. What is an imported product's "normal value"?

A: The normal value of an imported product is its comparable price when sold in the country
where it is produced or the exporting country.

3. Q. What is its " comparable price"?

A: Comparable price means the domestic price of the imported product in the country of
manufacture or origin. This price is usually the exfactory price at the time it is sold or
offered for export to an importer in the country of destination, in this case, the
Philippines.

4. Q. What are the essential elements that constitute dumping?

A: Three elements need to be present:

 Price difference between the actual purchase price paid by the importer and its
normal price in the country of origin;
 Injury or harm to the local industry;
 A casual link to show that injury to the local industry is directly due to dumping.

5. Q. What products are subject to anti-dumping protest?

A: All products imported into the Philippines may be subjected to an anti-dumping protest,
except:
  Products imported by or consigned to government agencies to help stabilize or
supplement shortages in the country;
 Conditionally duty-free importations allowed under Section 105 of the amended
philippine Tariff and Customs Code.

6. Q. Who may file an anti-dumping protest?

A: Under the anti-dumping law (RA 7843) any domestic producer or producers association
who is unduly affected by dumping may file a protest against the exporting country of the
product that is dumped.

7. Q. Where are anti-dumping protests filed?

A: An anti-dumping protest shall be filed in writing with the Revenue Operations Group of the
Department of Finance (DOF).

8. Q. What information are needed to support the protest?

A: For an anti-dumping protest to proceed, the following information must be provided:

 Specific description of the product under protest;

 Country of manufacture or production;
 Country of last export sale or origin of shipment;
 Purchase or export price of goods under protest or C&F price Philippine port minus
shipping/transport costs;
 Normal value of imported product;
 Proof of actual damage or threat of injury to the domestic industry;
 Name and address of the importer;
 Identity and Profile of Protesting domestic industry / association/ federation and its
current principal officers;
 Volume and Value of the alleged dumped products ;
 Actual production and production capacity of protesting industry/ association/
federation for the last 12 months;
 Audited financial report of a domestic producer or a member-producer of a
producers association for the preceding three years.

9. Q. Is there a fee imposed when filing an anti-dumping protest?

A: There is no filing fee imposed in anti-dumping protest. It is advisable , however, to get a

lawyer with experience in dumping laws to facilitate compliance with the procedural and
substantive requirements.

10. Q. How is an anti-dumping investigation conducted?

A: There are two phases in the investigation of anti-dumping protests:

1. Preliminary investigation. This includes consultation and clarification to determine

whether there is a prima facie case or whether the protest in fact meets the
elements that constitute dumping so that a formal investigation is justified. This is
done by the Bureau of Import Services (BIS) under the Department of Trade and
Industry (DTI);

2. Formal investigation is the administrative and fact finding proceeding which

 includes filling up questionnaires designed to gather transaction data and other
information useful in the overall evaluation of the case. This is done by the Tariff
Commission.

11. Q. When is an evidence considered "prima facie"?

A: An evidence is "prima facie" when the difference between the purchase price and the
normal value of the imported product in question is established. The investigation,
however, is not only confined to the price difference but will also include overall evaluation
of other documents and data to support a presumption that dumping indeed has occured
or is occuring.

12. Q. What is the coverage of the investigation?

A: All shipments/importations of the product under protest from the same countryof origin
within 150 days prior to the formal filing of the protest are covered in the preliminary
investigation.

13. Q. What is done to shipment in question while the investigation is going on?

A: Shipments under a dumping protest may stll be released provided the importer puts up or
deposits an anti-dumping bond equivalent to the amount of the estimated margin of
dumping