LE III.

– PROTECTION AGAINST DECEPTIVE, UNFAIR ANDUNCONSCIONABLE SALES ACTS

OR PRACTICES

CHAPTER I
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In determining whether an act or practice is unfair and unconscionable, the following circumstances
shall be considered:

a) that the producer, manufacturer, distributor, supplier or seller took advantage of the
inability of the consumer to reasonably protect his interest because of his inability to
understand the language of an agreement, or similar factors;

b) 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 consumers;

c) that when the consumer transaction was entered into, the consumer was unable to receive
a substantial benefit from the subject of the transaction;

d) that when the consumer was entered into, the seller or supplier was aware that there was
no reasonable probability or payment of the obligation in full by the consumer; and

e) 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.

Article 53. Chain Distribution Plans or Pyramid Sales Schemes. – Chain distribution plans or
pyramid sales schemes shall not be employed in the sale of consumer products.

Article 54. Home Solicitation Sales. – No business entity shall conduct any home solicitation sale
of any consumer product or service without first obtaining a permit from the Department. Such permit
may be denied suspended or revoked upon cause as provided in the rules and regulations
promulgated by the Department, after due notice and hearing.

Article 55. Home Solicitation Sales; When Conducted. – Home solicitation sales may be
conducted only between the hours of nine o'clock in the morning and seven o'clock in the evening of
each working day: Provided, That solicitation sales may be made at a time other than the prescribed
hours where the person solicited has previously agreed to the same.

Article 56. Home Solicitation Sales; by Whom Conducted. – Home solicitation sales shall only be
conducted by a person who has the proper identification and authority from his principal to make
such solicitations.

Article 57. Receipts for Home Solicitation Sales. – Sales generated from home solicitation sales
shall be properly receipted as per existing laws, rules and regulations on sale transactions.

Article 58. Prohibited Representations. – A home solicitation sale shall not represent that:

a) the buyer has been specially selected;

b) a survey, test or research is being conducted; or

 c) the seller is making a special offer to a few persons only for a limited period of time.

Article 59. Referral Sales. – Referral selling plans shall not be used in the sale of consumer
products unless the seller executes 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 said seller with the persons referred by said buyer or for subsequent sales that
said buyers has helped the seller enter into.

Article 60. Penalties. –

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 (1), the court may grant an injunction
restraining the conduct constituting the contravention of the provisions of Articles 50 and 51
and/or actual damages and such other orders as it thinks fit to redress injury to the person
caused by such conduct.