NGA ALITUNTUNIN KAGAWARAN, KAWANIHAN AT ‘TANGGAPAN AT MGA KAUTUSANG PAMPANGASIWAAN, (DEPARTUENT, UREA AND OFFCE ADUINISTRATINE ORDERS. ‘AND REGULATIONS) REPUBLIKANG PILPINAS KAGAWARAN NG KALAKALAN AT INDUSTRIYA ‘Department of Frade and Indsty) ‘Masam, Merwo Mama ‘DEPARTMENT ADMINISTRATIVE ORDER NO. 2 ‘Series of 1999 Subject: RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 7394, OTHERWISE KNOWN {AS THE CONSUMER ACT OF THE PHILIPPINES Porsuant to Title X, Bok IV ofthe Administrative Codo of 1967 and to more effectively implement Title Ill — Chapters, LIV, Vand Vif Repalic Act No. 7396, otherwize known at ‘he Consumer Act of the Philippines, Use following rules and regulations are hereby promulgated ‘Tile I— GENERAL PROVISIONS Role I Title Section 1 Tule — These Rules shall b referred ta the Implementing Rules and Regulations for the Consumer Act of the Philippines Rale Il. Scope and Coverage Section 1. Scope and Coverage —Bxcept.as may otherwise be provided, the following Roles shall spply to all consumer products and ervices,excopé feed, drugs, davies, cosmetics and Ihesardoussebsenees an ngicultvral producte which hal be ‘under efron of Uheconcerned departments or agencies, Role IL. Construction Section 1 Cansirution —Thebsstintorastofthe consumer ‘halle considered inthe interpretation and implementation of ‘hese Rules ‘Rule IV. Definition of Terms Section 1. Definition of Terms — Por purposes of these ules; ho term: TT Advrdsement —means the prepared and Uarough any ‘orm of mass medium, subsequently applied, disseminated or ‘Sreulated advertising mater. 112 Adiwrfser means theclient of the advertising agency 1 the sponsor of the adverUsement on whose account the ‘vertsing prepared, eonceptualize, presented or dssemi- ‘ted. Iemay also be referred to asthe sponsor.” "Ta. duertising — means the basiness of eonceptuaicng, preventing making available tothe public, Uorough any form ‘timass mecia, fact, data or information bout the attrbates, Tetures, quality or availability of ensumer product, services oreredit, "dering Agency or Agent —means service organi zation or enterprise cresting, conducting, preducig,Imple- ‘entiagorgivingenanselon promatanaleampaignsor programs {heough any medium fr md in behalf of any advertiser. 15 Advising Matter] Message —means any Tact, data or information aboot the Tostares quay er avabaty ot any ‘consumer produc orvceor ereditpresenodor disseminated to ‘the general public o to target market or audience through mess media nd ther formofeemmaniesion inorder toindace Eales, se orpatronage thereat Any infrmation or disses tion of information regarding sles promotion campaign of a fonbumer produc, xrviceoreeditshall be eotaidred adverts- Ing matter er mosaage ofthat product servic or credit aswell‘sof the alee promotion campaign and shall be subject othe Tiles and regulations governing both. 1.8: Agricultural Purpose means a prpose related’ the praduciin, harvest, prcesing, manufacture, distribution, ‘orago, transportation, marketing, exhibition, or dspeltion of Aerealtaral fishery or marine prods. 1L7- Arte Presentation roca the ase of any ofthe vinual arts refer in Ue labaing of a eater product 118 Basle Meceses — means rie, cor, bred, eh, ried and canned fish and other marine product, reah pork beef and pouliry meats, fresh eggs, fresh and processed milly fresh ‘egetables, root crop, offic, sugar, chara, candles, and (rage classified as escentil by the Department of Health. 19.Brond new Product —mesnsaconsumerprodict which has never boen zed 110, Busticss Nome, Frm Name, or Siyle — means any ‘name of designation other than the trae name ofa person, partnership, cnporaton or association which ie wed or signed In connection with hiss business o in "LIO.1 Any writen orprinted receipt fer taxon business; 111032 Any writon or printed contract not verified by a notary publi, 1103, Any writen or printed evidence of any agree: ‘mentor business tranaston and 1.104 Any sgn or billboard kept conspicuously exhib- ted in plain view in or the place of busines, announcing a firms nate or business name o tle LIL Chale Distribution Plansor Pyramid Soles Schemes — means sles devices whereby a person, upon condition that he makes a lavestnent,isgranted by the manufacturer, reducer ‘rimporter or his representative, aright to recruit for profit one ‘ormoreadchbonal persons who wil also be granted such right ‘open making inilarinvertment: Provided, That the roftact ‘the person employing vache plan are derived primarily from the reeritment of other persons into he plan rather than fom the fale of eonsumer products, services or eredi: Provided, further, ‘That the limitation on the number of participants does not chang the nature of the plan, 1.12, Clim Period — means the ie day upto the lst day ‘hata winner may claim his pie 115. Claing-ot Sale—meunsa consumer sale wherin the seller uses the announcement a croata he impression Dat hes willing ir langediseount on merchandivein crderto reduce, Aisposeoreinse-outhisinventoryandbusiness Asaformfsales promotion through pice reduction, whether or net combined Ith ether fermecfstles promotion campaign aclosing tele ‘ay bo undertaken TILL By the manufactarer or producer ofa consumer product reducing thepriclsePhisproducUs for salto the Publican account of ts intention to spate ofits inventory brminimizs lees ast loss or terminates operation ofits basiness, 1.182, By the owner or operator of eonsumer service firm by reducing the priels ofthe service he offers tothe publi er L123. By astoreor asimilarestablishmentby reducing thepries ofthe totality ora scortan class or amber of merchandic, 1114, Commerce —meansthe sale lease exchange, trafieor isrination of gonds, commodities, productions, services or property, ungibleo intangible "E18: Compsition — means a sles promotion scheme such sa.botnotlimitedtoquianan contests and tournaments whereby participants eompetein Ueiror thelr entry's skillor physical or ‘ental attribtes to win the promised prize ar reward. L1G, Consgnee the agent whosellsa consumer producto the general publi ima consignment transaction LIT. Consignor — the owner of «consumer product in a consignment transaction, Ter Cussignnent-assuneciltranascton whereby the wmnerof acmsuimer product sellsDiosame tothe general public through an agent who may boa retailer or wholesaler wis he tendiion that ownership a the goods remains with the owner, Sthetherorsot security deposithasboen madeby thesellerand that goods sot sald may bevetamed hy the agent tothe gwmer there1.19, Consumer — means a natural person who ie a pur- chaser, les, recipient or prepective purehaser lessor oF ‘ecipient af etsumer products services or credit 4.20. Consumer participation — means Uh actin adition to or othr than the at of purchase, lease or acquisition or ailment ofaconsumerproductor eerie, by which consumer, ‘knowingly or otherwise takespartina salspromotioncampaign which promises gain or benefit, such ar through prizes or ‘rewards for purchase or through winning in a contest, game, tournament or other similar competition 1L21 Consumer praducte and services —_meana goods, serv- fens and eres, debts or obligations which are primarily for personal, family, househald or agricaleral purposes 122. Consumer transaction — means (1) asa, ease, a¢ sigoment, award by chance or other disposition of consumer products, including chattels that are intended tobe alized to and, orefsorvioes,orofany righ, te or interest therein, except sures aadefinedintheSocuiiesActndcontractcfinsaranee Under the Insurance Caeori)agrant ar provision of eed fonsumer for purposes thet are primarily personal, amily, housshold or agricultural or 2) asalitation or promotion by © upplior with respect toa transaction refered ton ce (D- 1.25. Covostte ~ means any sutance which en contact withlivingtisoueshallcausethe destruction ofisueby chemeal 1124, Coometics—means(1) articles intended tobe rubbed, ‘poured, sprinkled or sprayed on, introduced into or otherwise [plied tothe human body or any part threo fr cleansing, beautifying. promotingatractivenessoralteringthoappearance, ‘and(2)arileintondedforuse seacomponentfany euch rile ‘xcept chat such term shall nt include soap. 125. Counteretpruct — ina sy ener prod whichorthecontainerrlabalingof which, witout authoriaton, Dears the trademark, trade name or other identing mark, imprint ordeviceoranylikenestheretofa consumer prodct manufacturer, proctor packer, distbutar, ober than the ‘ersan er persons who, infact manufhctured, pressed, packed for distribated such product and which thereby falsely purports ‘or is represonted to be product orto have been packed or istriated ysach onvamer reduc manufacarer, proesor, packer or dation "Dh Dene salesactorpractin—eenerningaconsuner product or sevice, meane a aco pase ofthe producer ‘anufacturer, super or slr, or ower or operator 9 ‘Snoumersovieorrepeirfimefindatingorentcingeconsumer {Senter itonslesrloey transaction cary onmamer product af eserves toogheonesalment fle represen: dant manipulation. Ta. Deportment eerste Department ef Trade and Ina 12, Demonstration — means an exhibition fhe perform ance fa conzamer pods on stor how consumer sie tehe undertaken, whether lore, daring or afer the perfection ofthe sales agrment "12. Deteoraed Product or Serap Product ~ means a consumer protean no longer be wed for he pupore fr Sieh was made prodoced or manufactured. 130 Direc Mrtotng ~ means the sale of consumer pro ucts or serves ty sal telephone, any form of tlecomman- {stony mereage delivery eresor ie fetiezo rough any frm otmase nedia bur chal ot nelede general advertising “LBL Dircor—efre othe deta any regional ce x provincial en ofthe Departnent of rade and Indy "E32 Duration of Promotion or Promasion Period — means the pored coving theft tthe las ay at partipant ‘rayne sndorpreseatentriestossaespromaioncampai. "T3. ey Form —-means an insrament by whch ar ticipnt aie entry, quale, proealifeso prpats in fertan sates promotion eampalna,Erry forms may be any prof of purchase, ase or patronage of consumer product, eis of erett rach ne rege, eupons, okey wrepPer, {thes pechagingcapscownsor ay cterinsirament wheter tract oecmpanied by any poof of purchase: Wentiying te purdpantantcontrming tothe neicauposorreqemet Teli down i the mechanic. 4 Bepras Warn ~ieans any afrmation of facto any promi fy the aller relting tothe thing Hf he nto tttdeney fh afimaten or protest nde he Dyer oorcas th same andthe bayer urbe the sane eying 185, Fale, Deceptive and Misleading Advertisement — An auvertgement shall be false, deceptive or misleading it In canformity with the provisions ofthis Actor fits misleading |i dmaterial respect. tn determining whether anadvertisement is false, decotive or misleading, hore shall be taken into sscount among athe things not only representations made oF fny combination thereof, But also the extent to which the tdvertsement filet reveal material fact in the light o euch ‘epresenations,ormatarals with respects consoquences which ‘ay reslt fom the uso or application of consumer products oF torvicestowhich headvertisementrolates under he conditions ‘resoribed in said advertsoment, or under such conditions ae fre customary or seul, 1135. Flammable means any substance or matril that highly combustible and seltigniting by chemical reaction. 1ST. Full warranty — means.a written warranty which {ncliderall he minimam requirements set forth n those Rules 1138, General Make means a commen syle, characteristic corset of charecteristies, manner ofenatraction o production oF ‘manefacturng process shared by a numberof eonsumer prod. ‘ete distinguishing them as alate or belonging toa colletivy. "L39. Graphic Prewenteion —means the use of graphic art cor printing te labeling ofa consumer product 'L40, Home Solictation Sales —~ means consumer asles oF Joases which are personaly solicited ary person, organization threogh person-to-person contac at thebuyers=residenco, place of work, atthe sellers transient quarter or at any appotnted place, ekeopt the sllrorlssor's usual plao of business LAL Immediate Container — means the container or pack: age whichis insmedintely after or near the mbstance but does ot include package liners. 142. Implied Warranty — means rights and obligations of ‘he partisin contract orsale proceedingTrom thonatareot he ‘contrat or from aw "LA3. Instant Sales Promotion —means a kind of promotion where the promise ofa price, reward or bonafit is not aconsid- ‘ration forth purchase or patronage of a product or service. ‘A short eae promo asin 1 hour er 30 minates would not ‘qualify ae instant soles promotion, sf dhe sponser hed been ‘sdvertising the same a day or even few minutes before Die service subjectof «consumer credit transaction 1145 Label labeling —meansthedisplay of written, printed, or graphic matier on any consumer product, its immediate ‘oatainer, tag Iteratore or oer eaitable material affixed ‘hereto for the purpose of giving information as to the identity, ‘components, gradients, tributes, diretions for use, speci ‘ations and vod other information ae maybe required by lw or regulation. (8 Lay-aeay plan —meaneaconsumercreit transaction _wheraty the yer of consumer products sllowed to pay by atallmentorat a futare day, whether o nt a reservation fo equied, prvided that the porcession and ownership of the product remains with the seller uot ful payment atthe time ‘greed upon. "LAT. Limited warranty — means a wrtton warranty which does not meet the minimum requirements set forth in these Rules ‘Tas. itersture — means any printed materi] accompany: {ng consumer product or provided in roation to a eonsumer service or credit stating specications and details concerning the uae oushprodut, serie or eet. Under those rales and regulations, such iterstre shal be afore of labeling "L49. Manual — with reference to a consumer product, mean form of literature containing specific instrutions sto the products ws, assembly, or operation. To. atonsfacturer-mcensenypercenwhemansfacturet, assembles or process consumer products, except that if the foods are manafoctured, assembled or processed for another ‘eraon who maches his own brand name to the consumer ‘rodacte the Inter shall be deered the manufacturer Tn ease Stimported prducte, the manafresaers representative oF in bis absence, te importer, shall be deemed the mamufactaer.10 1.51, Market — means the consuming publi er a ease, sroup or potion hereof to whom an advertisement or ale ‘romotin campaign is directed, for the purpose of inducing the se arpurehass oa product or servieorpartspation na ales promotion campaign a the nae may be 1.82. Mass media ~ refers to any means or method ated to convey advertising messages tothe pubic such a television, Fadio, magazines, cinema, billboards, posters, streamers, ‘handbills left, mails and the ike 1.58. Mechanics — means the rules, procedure and eriteria boy which one may participate and win and by whieh the winner ‘may claim his prize ina ales promtion campaign, 1.54 Nationwide national Ur egpe when used in cnnee- tion wth sale promotion including beauty contest, covers tho islands of Lazn, Visayas and Mindanao 1.55. Negative Options Plan — refers toa sales scheme wnereby a consumer producer description theretissent to fonsumer and considered sold to him unles the consumer ‘otiorthereller ois intention nt tobuy the product or toby ‘nother product offered as alternative thre, 1.56. New product — moans 2 eunsumer preduct which incorporates 'a‘derga, materi or form of energy exchange ‘which has not previously been used substantially in consumer ‘rodets and as to which there exists a lack of adequate infor ‘ation to determine the quality and safety of wach product if {sed by the consumers, 1ST. Non functional slack fll — the packaging ofa con sumer pradact shall br deomed tobe non-functional slack fled illedto substantially lessthan iteapatyorreason ‘other than (1D protection ofthe contents of such package, (2) the ‘aquirement ofthe machines used for enclosing the contents in ‘Such package, or) irene sharactertcs ef peceage mate: Tals or construction being used 1158. Open-nd erdi plan — means a consumer credit ex: tended onan account pursuant toa plan under whic: 1158. The creditor may permit the person to make purchases ar abtain lane, rom time to time, drelly from {hecreditor or indretiyby use oferediteard check or ther devin 1.58.2. The person has the privilege of paying the Delanee 1158. Finance change may be computod by the creditor from tine to timo on an understanding unpaid belanes 1150, Package or packaging — means any container or wrapping in which any eansumer product x enclosed forse ‘he dalivery er doplay of that consumer preduct ovata por ‘chasers, but doesnot iclude 1159.1. Shipping containers or wrappings usd solely or {he transportation any consumer product in all orn big ‘quantities by manofacturers, packers or processors to ‘wholesale and retail distributors Ceren; 115032. Shipping cntainors er oater wrappings used by retailer:o ship or deliver any product. retail eastomersif Sch containers or wrappings bear no printed matter por. faining te any particular product and 11594. Wrappers or cantaines of consumer products sold in small quantitis by small rotail stores tothe ean ‘Samer which by tradition are wrapped with ordinary pape, 1.60; Penalty clause —meane a apalston ina coiraet or ‘repair oF sorvicing wherein the prie ef the serve is to be ‘laced by a mpecfic percentage or amount ithe Gime schedule ‘agreed on when i wil be fnahed snot mt “LEL Philppine Standard Mark or Philippine Standard Certification Mark or P. 8. Mark — means the certification of complanes product standardsissuedby the BureauefProduct Standards ofthe Department "1.62, Poionous substance —means any substance capable ofdestryinglifeor seriously endangering health when applied externally tothe body or introduced internally in moderate ose . wherein the sual bone derived rom purchase of prodctot fvailment of service i increased by: 1.68. The adition in weight or quantity ofthe same products "1.65.2. The grant tothe purchaser an his beneficiary of fan exclusive right to purchase or avail of gis, another Droductorservic or benefit fries at a redted pric or at‘he usa pric, which right would not have been avilable without such pare 116A. Price reduction means sales promotion scheme, ‘uch 9s butnot limited to seasonal ales reduced-evenue sales, Aiscount sales, closing-ot sales, and inventary sles, whereby “purchasoota produrtorservcebsingpromotod is encouraged by ‘reduction ins usual ree, without acorremponding reduction In quality, quantity er benefit 1.65, Price Tag-—meansany device, written, printed, axed ‘oratached toa coneumer product o displayed in a connsmer ‘epniroraerviceeatablichment forthe parpese of ndiating the Fetal price por unt or service 1.60, Principal Display Panel —meansthat partofthelabel ‘hat je most likely 9 be displayed, presentod or shown or ‘examined under normal and eastomary conditions Contented ‘with secondary dieplay panels Une principal display panels the label which contains the identieation ofthe preduct and given ‘the most vay by dhe ele. 1167. Private Labeler — means an owner of a brand or trademark on the label of customer product other than the manufacturer of product "Aconsumer product bears private aba (a) th product ‘rite container is labeled with arand or trademark of «person ster than itsmanufactuer;or(2}thebrandor trademark othe ‘manufacturer af such product dees not appear on such label 168, Product bonding means kind of sales promotion campaign whereby two or more products are bonded, pasted, ‘Sed, pot or sold tagather asa combination at th ussal price of ‘the product being promted or tt. price lower than Une rom of the bonded predicts thereby increasing the benefit for thelr ‘porehace, Product bonding i kind of premium in-pack slot 169, Provinla Office —means re oMieofUneDepartment ‘ot Trade and Industry in province. 1170. Radioactive Substance ~tmeansany substance which emits iodizing radiation. 1.11, Rafle Claim Stub, Claim Stub ina Sales Promotion Campaign Inoloing a Rafe — means that part of Ue ralfle tickets kepty the participant forthe purposectelalminghis priae should he win inthe promotion. 1. Tha: Rafe Promaion — means a sales prometion scheme whereby the consumer participates by securing & {alle ticket from the sponsor op promoter whether 8 par- ‘haseis ade ornotand accomplishes the same neeordingto ‘he rules mechanics or procedures provided by the sponsor fr promoter as approved by the Department. A consumer partepant may win by drawing the rae entry form oF Faflestufrom llth entries received fromall participating 1.72, Rale entry form, rajfle stub in a sales promotion campaign iniving a raffe means thet part of the rae ticket tabe ued as enty form therefore and which contains the ‘equied information bythe sponsor from apartipant. 1.73, Rafe tice i a vles promotion eampaign involving raffles — means the rae entry form or stu and the corre ponding rae claims stb. "Le Redemption — means a sales promotion scheme swherahy the sponsor promises to award pres or rewards to Tolders of winning entry forms or proof of purchase ofthe product being promoted 1.5. geval sle ~ means the sale or lease ofa consumer product or service tam buyer refered by another buyer for 8 eration, whether for a fee oF some ather benefit 1L 16. Refer or ppacher —~ means a parson who, with ‘rit from te maker producer or manufecturerofatensumer product sablivdes, andlor ropackages and relabels the same, tiling his brand name, tradename or business name thereto, ‘nd sells theconsumer produc, whether in wholesole or retail Iwieher or a0 the maker, producer or manufacturer is ee nowledged in the label orn the sale thereat “UFT Regonat oftor— retort any of Une regional ices the Department of Trade and Industry. (LTE, Retilr — means a persun engaged inthe busines of selling eonstmer products directly to consumers, 1119, Sale by deseription — means the sale or lease of canstmer prac or service whereby the only inducement is through a dercripton ofthe prodactorservin ether verbally oF ‘hroogh any form a erature. 131.80. Sale by sample — means the sale or lees of consumer products whereby the prospeaive bayer or lessor any able to Inspector examine a consumer prodct forsale throsgh an ‘example, mode, prototype of th ecasumer product orm sped tes fom among sveral ants being soldi tts or ball "1.81. Sales promotion — means tachniques intended for broad consumer participation which contain promises of exin such as prizes in cach orn kind, a reward forthe purchase of ‘8 produc, security, servie or winning in contest, game, aur ‘nament and other similar eompetitions which invlve delaras ‘ation of winners and which utilize mass media or ober forms of communieatin to disseminate information onthe same. Tt lo means techniques purely intended ta Snereae the sal Patronage andlor goodwill ofa product. As cantrased with sdvertsement a sales prometion campaigns conducted within {shor period af time with th principal abjective of radially increasing the sale or patronage he produc, sorvce or red ‘under promotion or improving es goodwill or mage within the period ofthe promotion. The fact that a sales promotions eam Daign is addressed to particular class or sector of the public Shall not removeit rom the ambit ofthe term "brea eonsumer pertspation”™ 1182, Sampling — means a sales promotion campaign wwnraby the spensotpromater gives away for free products er 1.88. Serap consumer product or deteriorated consumer product — means a consumer product whih can no longer be "sed far the purpoe fr which it was made, manufactured or produced 1.84. Secondary display panel — means any label on the culsde ofthe packaging, container, or wrapper of «consumer Dred, oer tan the principal display pane, visible tothe buyer by ardinery inspection ofthe product upon purchase 1188. Send hand product — means a consumer product which hi already boen used but could sill be used for the Dorpete for which twas made, manufactured or produced. "LRG. Seeretary — refers to the Secretary of Trade and Industry 1.87. Seeding —meanste procets puting winning entzy forms into the regulr circulation in the market 1.88, Selle" means a person engaged inthe business of sellingeonsurer products diveaytoconsamers Ishallinclade supplier or dertntor 1188.1, The seller is @ subsidiary or afiate of the supplier distributer, 1.88.2 The seller intershanges personnel o maintains commonoraverlepping ofcers or dnectors withthe supplier or distribator 1188.5 The supplier or distributor provides or exercises supervision, divetion or eantrl over te selling practices of the seller 1.89, Seriees — means services that are the subject of @ ‘consumer transaction, either together with, or separate fom {any kindof personal property, whether tangible or intangible, 1.90 Soliceation means the ctf actively and tareugh a person ta prrsn interaction, whether personally, in wting ot by telephone, ov such ather means, indocing or convincing censumer to tuy or lease a consumer product to avail of & 1191. Sponsor — means the person, erganizaton, rm oF corporation wolly or party paying for or nancing the adver- tisement or sles promotion eampaig. 1182. Standard means et of conditions tobe failed to ensure the quslty and safety os product. 1183. Sion Sensilizer— means any substance which will ‘ause on normal living issue, allergy o photo dynamic quality othypersensitity which botomes evident en reappiction of ‘hesemosubstancetobedesigatedansuchby theimplementing ‘ageny.Beforedesgnatingany substance as astrongsensitize, Dieinplementingagency upon eonaideradan ofthe freqoeney ot ‘occurrence and severity of the reaction, shall find that The Substance ha significant capacity to cause Rypersensiivty. 1.94, Substindard Product —meansaproductwhichfalsto ‘ampiy with an applieable consumer product safety rule which ‘creates a substantial isk of ijary to the pubic. 1.95. Supplier — moans person, ofher than « consumer, wo, in the eure ohis busines, soit, offers advertres otconsumer product or service or owner or operator of camer service firm in a consumer sae transaction. Pro Implied Warranty — means rights and cbliga- proceeding from the ‘ive mI PROTECTION AGAINST DECEPTIVE, UNFAIR AND “UNCONSCIONABLE SALES ACTS AND PRACTICES Chapter! DECEPTIVE, UNFAIR AND UNCONSCIONABLE SALES ACTS AND PRACTICES. ‘Rule L Coverage — Theos rule shall apply to acts and faseof any consumer product andi the serie.ule Il Prohibition Against Deceptive ‘Sales Act and Practices “Among Themsel dures; ‘2:14. Approval or Sponsorship of Person or Group of Persons Whether Individually or Informally Assotated jes — a signed and unrevoked document 22, A connumer product or service has the performance, characteristic ingredients scceasores, uses orbencits tds accordance wih the previoss representation when infact tisnot,r. 2.7. A consumer product or sarvee can be supplied in a ‘quantity geatar than the supplier intends. ‘Asorvice or repalrafa consumer productieneeded when | ‘na sales transaction, in any document evidencing such sale or "anywhere in a store or business establishment. Section 8 Chain Distribution Plans or Pyramid Schemes — ‘Chain distribution plans or pyramid sales homes shall not be ‘Smplayed inthe ele af consumer produce [Role IL, Unfair and Unconscionable Sales Acts or Practices her Rossrsbabre taingoraher De conemer tana Section 2. Circumatances to be Considered in Determining Into, the price grossly exceeded the price at which similar productsorservces wereveailyebiainablein simlartransecion by ke consumers; ‘2 That when the consumer transaction was entered "2.5, That the trantaction thatthe seller or supplier in doce the consumer tote nto was exensvely onesidd in favor of the seller or sappir.ule IV. Rules on Certain Sales Acts and Practices Section 1. Sal by Sample —Tho sample used inthe sling sstcnopneeareenmnerneanrangnenane wonton 411. Whereaprior writen greementforthepurposehad ‘been tered the seller or esor and the buyer o esse, ment is part of prior subserp- tion agreement betmeen the seller or lessor and thebuyer cr “213, Inthe cas of els or organizations where such Section 5, Referal Sales — Refer selling plans shal not ‘be used inthe sale of consumer products unless the sller {tanta specified compencation or oer benefit to sad buyer each ad every transaction consummated hy the sid "wih the yersons referred by sald buyer or fr subsequent Section 6 Sale by Vending Machines — Where consumer products are ald throagh vending machines or like machines the name and businessRole V. Home Solicitation Sales Section 2. When to Apply for a Permit — The permit to ‘onduthomessicitationsalesshallbeappied for upon electivity fof these Rules or upen opening of home solietaten sales business and every two years thereafter the Department's regional office which has jurisdiction over such provinces; ‘3.2. I the home salitation sae isto be conducted within ‘eiatatin of “45, The ope and daraton af authority granted to such agents; “46. Aspecimen ofthe authorization given tosuch agents and ‘47. Acspocimen of he deniation given to such agents Section 5, Updating of formation on Registered Agents for afore 852. Any new agent hasbeen authorized by Dv ap candt home sltatin sles in its behalf 3 Department, after due notice andhearing, on any ing grounds,Section 8, Home Solicitation Sales: By Whom Conducted — es may be conducted by » person who has ation and authonty fam his principal to E ‘Rule VI Rules on Consumer Service Firms Section 1 Representation a to Availablity of Certain Fa "scorrespondingrefundef payments ready Secon 2 play of ene Operate Consumer eee or regulation THN nics covering touch branch ‘Section 3, Damage or Injury Caused by Service Firm — Any repair fr damage or njory caused by the service firm shall be ‘aid fr by th srice firm whether o not the repair is under- athe corvices of ‘without prjade to ales or under other existing law and reglations| ‘on reasonable rust, [Rule VI. Additional Rules on Consumer Repair and ‘Service Firms for Electrical Appliances, Electronic "Bauipment, Machines and Other Mechanical "Equipment and Motor Vehicles Scion 1 Baie undertaking any repo mviing of wee shall be informed by product, ‘When the consumer product has been dismantd to assess theertentofthe damage andthe consumer deeides to forego the stance ofa penalty 17. The tomized and total amount tobe psi ‘servicing ofthe predact, separatinglabor charges pare part or materials ave tobe procure ervicecan be dono and euch material are identified and arefor the account ofthe consumer. Section. ‘The repair or tervicingaf'acansumer product sh {cluding the pice of uch additonal work, Section 4 No replacement or chango in any ofthe paris of cmmumer procuct under repair shall be made without the Jenowledg and prior onsent ofthe owner. possible be pre [sreplacemenis obtainable only in the reparand sorvce firm, ‘he name, brand and price ofthe same shal be mae knows to ‘he consumer pri tothe actual rep[Rule I. Laws Governing Warranties on Consumer Products and Services Section 1. Applicable Lawson Warranty —1 provisions ofthe Civil Code on conditions and warranties, the flowing Rules shall govern al contracts fsale with warranties. [Rule IL. Terms of Express Warranties Section 1, lear and Understandable Language — Express warranties on consumer products and services shal be wettan In lea and readily understandable language. Section 2. Contents of Bxpress Warranties — Express war ‘antes shall, among others, contain tho fllowing information: 2:1. The basiness name and addres of the warranto, 22, The name and address of the person to whom the days nor more than ene (1) Yea encumer products product within a reasonable ofa defect, malfunction ot ‘unreasonable ine ofthe consumer product‘Rule IV. Recording and Reporting of Sales of Products 4. Record of Purchaser —Distebutors and retailers rehaseneovered Role V. Enforcement of Warranty Rights ‘Section 1.The Warranty rights can be enforeed hy present- sent of a lai, Tothisend; the purchaser needs only topresent ther the warranty eardo the oficial purchaser. immediate seller i Uhe manvfactare’s ‘dhe warranty shallimmediatalybebonored. te dstribator beeonsiroed as a waiver of his Mellons northe extnstion ote libiiy ofthe manvfactarer en ‘Rule VL Breach of Express Warranties es warranties by the warvantor, the DYE? he goods Topared or its purchase price however, hatin ese the TEES Gon daye be either the warrantor or his representative. ‘The Iaeyday period, however, may be extended by conditions THidharcbayeod the contre ofthe warrantorarhisrepresentative Orb agrecment ofthe pakis.ction 2 Proportions Reduction in Refnd of Parchane ‘Price — In case refu oi ‘oF the nomeonformiy shall be ‘Male VI. Consumer Service Warranties ‘Section 1. Implied Warranty in Supply of Consumer Services forthe supply ofscrvcestoaconsumer made torely,on the seller's silo ude Section 3, Quaranteof Service Firms — Serves firms shall prove unreasonable to expect the service guarantee to lst ninety (0) days ‘Rule VILL Prohibited Acte csatonce ofa warranty Chapter IV LABELING AND FAIR PACKING Rule I. Coverage Section 1. Coverage —The fllowing Rales shall apply tall senmimer products sold in the Philippines whether lealy ‘manufactured or imported. Satan? eon iwi le sao sa hazardous rubatances and be promulgated and enfored rect and registered trade name or brand name. If ‘nen or brand name sreistered fr the product, the ‘ordinary name by whith ts eommonly known may be usedos the acessories and their nmercaleount shall sin the tbe, ‘The flowing shall be deemed suficientcompli- ‘ance with this requirement: 162.1. Where a product is sold in single unite, ‘ates of toxic: plsonous products, the label shall alo exntain {he fllowing information:1.51, Direction for use or assambly, which shal be in able werd. Artisti, graphical repre rations may be sed in nition tothe fontents of express warranties as required by the preceding Chapter shall appear onthe label 15: Complicated moshaniea, cletricl or electronic app ances equipment orpreductstobeaseembledandthoee needing further assembly shal contain the following informaticnl. 22, Where tho buyer himealf provide the container fr his ‘purchase of consumer product retailed in small quantities, ule V. Information as to Compliance to Standards rig information shall appear "many secondary display panel: erewarnings rerequiredtoboplacedinthelabel, be rade in such way that they shall appear sore ros than all the oder words the label ‘See. Labeling Requirement inthe Principal Display Panel. 4Se 5. Labeling Regrets in the Principal Secondary Display Panels or in the Literature. re ‘or by an agency ofa foreign government. Se Aula of Ltertere fr Berta by Baer — “LI Are engaged inthe packaging or labeling of ach pod. 1L2.Preserbe or specifyby any means the manner in which such product are packaged or labeled; or 1.3, Having knowledge, refuse to disclose the souree ofthe sislacled or mispackaged products Ses. 2 Proibtion othe Words:"No return, No exchange.” — ‘Thewords:"Nereturn, Noeachange,orany other wordstosoch ‘fect shall no: appeat on any label or litratare of @ ensumer ‘rodct or en any rectpe forthe purchase of ewch prodisc PACKAGING Role VIL Size and Characterization of Packaging for ‘Consumer Products Section 1.Fair Packaging. — The packaging of consumerSee 5. Pockagingof Basic Necessities — Basle necessities shall nt se non functionally slack Silled packaging. sceurately represent the product in the ule VIIL Protection of Packnged Consumer Products Section 1. Protection of Product through Packaging. —The fand unstable terms, See. 4 Dangerous Packaging. — Where the packaging of owes danger to persons or property ‘ ngor disponal awarningorindiention stta what improper use handling disposal shouldbe avoided, ‘hall be provided on tho pockaging iss: Whenever posible, ‘irs-idtrestmentsandinformation when tisnecessary take {he vitim to phyeican shall also be provided in the package labeling. Role X. Price Tag Requirement on Consumer ‘Products & Services align Pres Tat RequirementorallCnumer Prodi in retail to the ries of prodacts whieh they reprosent, Sec. 8, Prive Tag Requirement for Lumber.—In the aso of aged or offered forsale tothe publi, the same ind indieating theron the price and the‘See, A. When Price List May be Allaved. — Pries of eon- Sec, 2, Use of Codes. — Prices of consumer products and service hall not be writen in code except in adition to price {tags labels, markings or pres lists as provided for in these Rules Tistein pesos ex ‘products tobe tld in foreign curreny asin thecasoof ty free Chapter V LIABILITY FOR PRODUCTS AND SERVICES [Rule I. Coverage Section 1 Coarage.—Thefellowing Rule shal apply toll rmanifactore's, producer, builders or importers of consumer Legal ervies andthe lke shall not be included within the coverage of fregeng Rules and all the other pertinent rules ale IL Lishility for Defective Products Sec. 2, Exception — The manufacturer, builder, producer aRole IL Liability for Product Quality Imperfection Section Liability of Supplier. — Supplier shallbejointly Tiable fo imperfection n quality of consumer products, ‘ec. 8, When ia Thare Product Imperfection. — With do rex king from their nature, the fllowing 23, When the consumer ora third party issolely at fault for the daft. products unfit ornadequate for ston for whieh they are designed or43.3. A proportionate reduction in the price of the product in the consurer shall retain ownership and possesion Sipplemented or reimbursed by the party which cased the damage, without prejudice tothe provisions of Rule V. Rule IV. Liability for Product Quantity Imperfection Section 1. Supplier Jointly Ligble.— Where there anemone 2.1. When such quantity variations eo inherent oF sm henaturect he product and isnot non-fnetion ‘See 8. No quant shallbe llowedin products packaged in sets and those products which are sold in eomponents or with Set eneiesof Consumer in Cues of Prout Quanity “25. The placement ofthe product by another ofthe same te model, withot the quantity imperfection: Pro ravithout prejudetolosesanddamagesany. sacement is Not Possible, —"The provisions ofthis Chapter shal slo apply to product ce 6 For proucts packaged in sets and these profes oe Pa cmap ecessories, the remedies:ale V. Notification Requirement for Product Quality rd Quantity Imperfections fotifeation. — The consumer shall notify the perfoction nthe quality andor quantity fhe ‘there the supplier unresconably delays such inspection, the ‘resading section but eich term shall no than one hundred eighty (180) days ‘Rule VI Liability for Defective Services quate information onthe Frat mofbetter quality services other for Service Quality Imperfection vided in the ofer or advertisement= The service Sec. 3, Remedies of Consumer in Cases of Service Quality LInperfections and Improper Services. — The consumer shall altarnativelyathisoptionthefollowing ofthe service, where applieabe, buraement ofthe amount paid, with mentary updating wiheo peje a leserand damage, any.or 13, Proportionato reduction in price. Sec. 4, Performance ofthe Service by a Prd Party. — The ‘modelasprovdedin hemansfactorerstachnieal specifications ‘intratual exoneraton of the roppler does nat negate such suarente, Rule XIIL Liability There it More Than One Supplierperformance or usecf the preduct or service Rule XVI Limitation on the Liability of the Manufac- (Chapter VI ADVERTISING AND SALES PROMOTION Rule Coverage ‘Section 1. Coverage — The following Rule shall apply tothe ‘advertising and tales promotion of all consumer products and fervices Pred, That with respect to food, drugs, devices, feumetics anc hazardous substances and agricultural products, the same shall be under the jrisdiction ofthe concerned de- partments. ‘the lke shallbe erompted from the coverage of these rules. ‘Rule IL. False, Deceptive and Misleading Advertise- ‘ments Section 1 Prohibition on Fale, Deceptive and Misleading Sirealy or fadrecty th posh of conmur prods Sec. 2 When Advertisement is Folse, Deceptive and Mis- leading. — An advertisement skal be fale, deceptive or mis- leading i tt natin conformity withthe provisions of the CConsutner Act ofthe Philippines or i itis misleading in & ‘material respect.‘Sec. 3. Determination of False, Deceptive and Misleading determining whether an advertisements ‘Advertisement among-ather copbinat eement ‘oveal material feta in the light of such ‘ropreaentallongyormaterialowithreapects consequence wih ‘ay rel rom the uae or application of consutnr produto Servicestowhichthe advertsomentrelatesunder the conditions Dretribed in said advertisement, or under sath conditions a8 ‘re customary or usual ‘ule IIL Truth and Accuracy in Advertising Section 1. Truth and Accuracy in Advertsing. — Any aa ‘or misleading advertcaments, Sec. 2. Advertisements Depleting Product Performance Demonstration. ~ Demonstration of product performance naa Sec. 3. Special Claims. — Any advertisement which makes special clams shall substantiate rach claims and propery use ‘research resula, eientic rms statistics or quotations. Sec. 4. Use of Research, Scientifc or Suroey Findings, Discovery or Results —No research, scientieortarvey find “surveys conducted using seientiGealy accoptable methods. ‘survey finding, discovery or result Se 6 Un of Rear Perso rte fom Jara tor ign ee Bupa Nveremntsi not prohibited by any lew, “appropriate department tobe njorious, unsafe or dangerous oF ‘declared tobe imminently such,‘Rule VI. Credit Advertising 1 Raqirements fo Advesing Consumer Crt ‘materi tee shld he ro apd accompanying service, any, coveredythecredit plan, the length of ime the payments matt be made, and the perenags of downpayment, i required Rule VIL Rules on Certain Advertisements uertizementeof sales promotion eampaigns.— ‘SALES PROMOTION OF CONSUMER PRODUCTS "AND SERVICES, ‘ule VII. Additional Rules on Coverage for Sales ‘Promotion of Consumer Producta and Services{orsidered nes romain campuign ws Sed under thse ‘Rule DC Permit Requirement ‘Section i, Aplisation for Permitto Conduct sales Promotion xemoton campaign i to be conducted in ‘a sngle region, in the Department's paid. Prohibited forms of sales prom: ‘Senod oatrght Incase of disap following formation and documents:1118 Thespecicity, municipality and provineandmumber ef ireptoneor th pr nd es where ney ferme may ‘The amount of prnas foreach category of winners. IF “Tab. Such cther Informstion, documents or evidences 28 smay be roqired by the Department in order to protect the Interest of tie publi. Sec 8. Fermit Fees. —A reasonable schedule of permit foes ‘to be determined by the Secretary to cover processing and nee of ermits hal be charged Sec, 10, Bremption from Permit Requirement. — Permits {or the felling sales promotion activities need not be applied for: eo10.1, Compstitons exept beauty contest conducted nation- ‘Provided, however, that soles promotion campaigns ex- ‘emped from the permit requirement shall be subject to all the ‘ther pertinent rales and regulations on sales promotion eam- signs [Rule X. Sales Promotion and Other Prohibited Acts ‘hereof or attachment Uhre shall be allowed nora perm be ‘issued therefore, Seg. Other nei ate product achome, or activity prohibited or de {ntematinel eles promotion, and such promotion is prohibited {in thePhilippnes, the lea distributor ofthe sume shallindicate ‘Promotion Campaign Impostblefoallthe pantera tocontinueto deliver tne productspromotion; “45. The time, date, and place of preliminary draws, pre-tom. — 8 ‘maximum of sx (6) months upon approval the Department. 182. Becoptions to Rule on duration, 181 Price reductions which shall not excoed tree (3) ‘months "222, Closing ont sala which shal not excod six (6) ‘rls on sales promation campaigns. Seo, 1, Sending. — Tha sooding of entry forms shall be ‘randomly nade without prejdice to consideration ofthe sizeof the area tobe ssedod andlor the population of targeted partic pants, Sec. 18. General Rul. — The following changes in the con- duct sale promotion empaig halle mae witout the 16,3, Duration, mechanies,prosotaes or terms and cond- tons ofthe sales promotion exmpaiens. "5. ualifieatons required ofthe participants, eriteria in ‘the determination snd slectin of winners. See. 16. The sponsor or prom ‘changes inthe ales promotion eampaign as wel asthe fact of the approval shall be published, announced or advertised atleast wie before such change is effected and in the seme ‘manner and medium thatthe sales promtion campaign war ‘announced, published or advertised bythe promoter or sponsor. tvith a deferred grand draw had been previously the Department. See. 21, Computerized Selection of Winning Computerised selection of winning entrie’number shall not be ‘used unless the program therefore ls spproved bythe Depart ‘ment upon determination ots fairness and randomness. Sec. 22 Claiming of Prise — Winners shall have atleast. ‘roughest the uration tthe promation, whether or not the supply of the preduets und 16. Percentago reduction im prices shall be computed to the nearest eentaso. However, in caso of such invalidation, another qualiied entry form shall be dar ns plae stub ta be retained by the participant for parpores of elaiming the price 2.5, Whore serial numbers on raffle tickets are provided as sscarity mark, the sume shall be conseeutive and shal 126, Drop boxes shall be properly sealed and placed in an ‘ccossible place wherein rae ‘ent weather and other destructive forces Drop boxer Collected by the sponsor or its representative and ‘Temoved the day immediately folowingthe deadline or droping ofentres. 12.7. Apartsipant may dop or send in more than one raf entry formarstub unless expressly disallowedbythemechanics of tho pronotan. 2resenting the genuine any form ‘See. 4. Competitions, — Salo promotions invelving the con- ‘participant of the promotion, no partiipant lacking of such qualifications or who ‘re-qualifention shell witnessed and verified by a representative from the Depart- See. 5, Parlor Gomes. — Sales promations involving the conduct of parlor games shall, in addition to Uhe rules on 3. He partner pre games thle randomly and publicly sebctod from qualified home viewersstenerureadersAeviation, modification, addition or deletion shal first be sub- rovided bythe Department. Rule XV. Information Dissemination and Advertsing Section 1. Dissemination of Information Regarding Salee Promotion Campaigns. — Asales promotion intended for broad ‘manner, date, place and time for selection or ot winbern, 3e categories of winners and their corresponding [ule XVI. Presence, Verification andlor Certification by The Department's Representative Section 1 Pree and Veeton of ners bythe De a‘Ste.2 Disposition of vali, Unqualified and/or Tompered Entries.—The promoter, und sion of the Depart- ‘invalid; unqualified andlor tam. sanufactrer of he product ole XIX. Quality and Quantity Section 1. Quality and Quantity of Consumer Prodets or tion Carngoign. — Ne reduction in qua ‘radeta or services under sles Dr Dremium or benefit granted by reason of the same shell be ‘lowed, ale XX. Mode of Payment for Purchase fhe conduct of sles promotion campaigns. lureof Sponsor to Deliver To cases where the sponsor je nota‘Tite vt Makati, Metro Manila une 10,1998 (ed) Risalino S, Navarro Secretary