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Consumer Protection ACT Notes

Laws on Business Organizations (Saint Louis University (Philippines))

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SALIENT POINTS OF THE CONSUMER PROTECTION ACT

Republic Act No. 7394 (Consumer Act Of The Philippines)

Constitutional Basis: Article XVI, Sect. 9
→ “The state shall protect consumers from the trade malpractices and from substandard or hazardous products.”

Consumer
→ means a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of
consumer products, services or credit

Consumer Protection
→ concept that is designed to ensure fair competition and the free flow of truthful information in the market place

Consumer Protection Laws

→ these are laws designed to prevent businesses that engage in fraud on specified unfair practices from gaining an
advantage over competitors and provide additional protection for the weak and those unable to take care of
themselves

Objective
1. Protection of customers against hazards to health and safety
2. Protection of consumers against deceptive, unfair ad unconscionable sales and promotes
3. Provision of information and education to facilitate sound choice and the proper exercise of rights by the
consumer
4. Provision of adequate rights and means of redress
5. Involvement of consumer representative in the formulation of social and economic policies

Basic Policy
a. to develop and provide safety and quality standards for consumer products, including performance or use-
oriented standards, codes of practice and methods of tests
b. to protect the public against unreasonable risks of injury associated with consumer products
c. to undertake research on quality improvement of products and investigation into causes and prevention of
d. to assure the public of the consistency of standardized products

What is a consumer product or service?

→ Refer to goods, service and credits, debts or obligations which are primarily for personal, family, household or
agricultural purpose, which shall include, but not to limited to food, drugs, cosmetics and devices

Agencies Mandated to Implement

a. Department of Health
→ Foods, drugs, cosmetics, devices and substances
b. Department of Agriculture
→ Products related to agriculture
c. Department of Trade and Industry
→ Consumer products (other)

Inclusions Required in Consumer Product Quality and Safety Standards

a. requirements as to performance, composition, contents, design, construction, finish, packaging of a consumer
product
b. requirements as to kind, class, grade, dimensions, weights, material
c. requirements as to the methods of sampling, tests and codes used to check the quality of the product
d. requirements as to precautions in storage, transporting and packaging

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e. requirements that a consumer product be marked with or accompanied by clear and adequate safety warnings
or instructions, or requirements respecting the form of warnings or instructions

Bureau of Philippine Standards (BPS-DTI)

→ governmental body under the Department of Trade and Industry
→ national standards body of the Philippines
→ responsible in developing/adopting, implementing and promoting Philippine National Standards Body
→ establish PNS standards for products, as well as test methods and codes of practice to provide the technical
bases for the inspection, testing and certification of these products
→ provide Bureau of Customs, a list of products under Philippine Standards, the PRODUCT CERTIFICATION as a
guide to incoming shipments
→ inspect or obtain samples from import shipments, covered by mandatory BPS product certification for testing
and certification purposes
→ issue conditional release pending the issuance of import commodity clearance and if denied, the importation
shall be re-exported by the importer
→ to conduct necessary tests for products
→ shall recommend to the Bureau of customs the issuance of warrant seizure and detention for offending shipment

Standard
→ document established by consensus and approved by a recognized body, that provides, for common and
repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the
optimum degree of order in a given context
→ Based on the consolidated results of science, technology and experience, and aimed at the promotions of
optimum community benefits
→ Means set of conditions to be fulfilled to ensure the quality and safety of a product

Kinds of Standard
1. Basic Standard
→ Standard that has a wide ranging coverage or contains general provisions for one particular field
→ May function as a standard for direct application or as a basis for other standards
2. Terminology Standard
→ Concerned with terms, usually accompanied by their definitions, and sometimes by explanatory notes,
illustrations, examples
3. Testing Standard
→ Concerned with test methods, sometimes supplemented with other provisions related to testing, such as
sampling, use of statistical methods, sequence of tests
4. Product Standard
→ Specifies requirements to be fulfilled by a product or a group of products to establish its fitness for
purpose
5. Service Standard
→ Specifies requirements to be fulfilled by a service, to establish its fitness for purpose
6. Interface Standard
→ Specifies: compatibility if products or systems at their points of interconnection
7. Standard on Data Provided
→ Contains a list of characteristics for which values or other data are to be stated for specifying the
product, process or service

Standardization
→ An activity of establishing, with regard to actual or potential problems, provision for common and repeated use,
aimed at the achievement of the optimum degree order in a given context
→ Consists of the processes of formulating, issuing and implementing standards
→ IMPORTANT BENEFITS: Improvement of the suitability of products, processes and services for their intended

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purposes, prevention of barriers to trade and facilitation of technological cooperation

Deceptive Sales, Acts and Practices

→ Article 50. Prohibition Against Deceptive Sales Acts or Practices. — A deceptive act or practice by a seller or
supplier in connection with a consumer transaction violates this Act whether it occurs before, during or after the
transaction. An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or
seller, through concealment, 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, the act or practice of a seller or supplier is deceptive when it
represents that:

a) a consumer product or service has the sponsorship, approval, performance, characteristics, ingredients,
accessories, uses, or benefits it does not have;
b) a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is
not;
c) a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered,
reconditioned, reclaimed or second-hand state;
d) a consumer product or service is available to the consumer for a reason that is different from the fact;
e) a consumer product or service has been supplied in accordance with the previous representation when
in fact it is not;
f) a consumer product or service can be supplied in a quantity greater than the supplier intends;
g) a service, or repair of a consumer product is needed when in fact it is not;
h) a specific price advantage of a consumer product exists when in fact it does not;
i) the sales act or practice involves or does not involve a warranty, a disclaimer of warranties, particular
warranty terms or other rights, remedies or obligations if the indication is false; and
j) the seller or supplier has a sponsorship, approval, or affiliation he does not have.

Labelling and Packaging

→ ARTICLE 76. Prohibited Acts on Labeling and Packaging. — It shall be unlawful for any person, either as principal
or agent, engaged in the labeling or packaging of any consumer product, to display or distribute or to cause to be
displayed or distributed in commerce any consumer product whose package or label does not conform to the
provisions of this Chapter.

The prohibition in this Chapter shall not apply to persons engaged in the business of wholesale or retail
distributors of consumer products except to the extent that such persons:

a) are engaged in the packaging or labeling of such products;

b) prescribe or specify by any means the manner in which such products are packaged or labeled; or
c) having knowledge, refuse to disclose the source of the mislabeled or mispackaged products.

→ ARTICLE 77. Minimum Labeling Requirements for Consumer Products. — All consumer products domestically
sold whether manufactured locally or imported shall indicate the following in their respective labels of
packaging:

a) its correct and registered trade name or brand name;

b) its duly registered trademark;
c) its duly registered business name;
d) the address of the manufacturer, importer, repacker of the consumer product in the Philippines;
e) its general make or active ingredients;
f) the net quality of contents, in terms of weight, measure or numerical count rounded of to at least the
nearest tenths in the metric system;

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g) country of manufacture, if imported; and

h) if a consumer product is manufactured, refilled or repacked under license from a principal, the label shall
so state the fact.

The following may be required by the concerned department in accordance with the rules and regulations they
will promulgate under authority of this Act:

a) whether it is flammable or inflammable;

b) directions for use, if necessary;
c) warning of toxicity;
d) wattage, voltage or amperes; or
e) process of manufacture used if necessary.

Any word, statement or other information required by or under authority of the preceding paragraph shall
appear on the label or labeling with such conspicuousness as compared with other words, statements, designs
or devices therein, and in such terms as to render it likely to be read and understood by the ordinary individual
under customary conditions of purchase or use.

The above requirements shall form an integral part of the label without danger of being erased or detached
under ordinary handling of the product.

→ ARTICLE 81. Price Tag Requirement. — It shall be unlawful to offer any consumer product for retail sale to the
public without an appropriate price tag, label or marking publicly displayed to indicate the price of each article
and said products shall not be sold at a price higher than that stated therein and without discrimination to all
buyers: Provided, That lumber sold, displayed or offered for sale to the public shall be tagged or labeled by
indicating thereon the price and the corresponding official name of the wood: Provided, further, That if
consumer products for sale are too small or the nature of which makes it impractical to place a price tag thereon
price list placed at the nearest point where the products are displayed indicating the retail price of the same may
suffice.

 “PM is the key.” = PROHIBITED

Consumer Rights
o Right to basic needs
o Right to safety
o Right to information
o Right to choose
o Right to representation
o Right to redress
o Right to consumer education
o Right to Healthy environment

Other Laws Protecting Consumer Rights

o Toy and Game Safety Labelling Act of 2013 (RA 10620)
o Cheaper Medicines Act (RA 9502)
o Air Passenger Bill of Rights
o Pre-Need Code (RA 9829)
o Anti-Lemon Law (RA 10642)

Anti-Lemon Law
→ Lemon Law Philippines or RA 10642 (An Act Strengthening Consumer Protection in the Purchase of Brand New

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Motor Vehicles), in order to protect buyers from lemon cars and assure its replacement from the dealership it
originated from

“Lemon Car”
→ All brand-new vehicle
→ Purchased from an authorized dealer in the Philippines
→ Gross factory defects and have unresolved problems and could not be repaired

Salient Points of the Lemon Law

→ Problem in car : bring it to the dealer right away
→ Complaint : recorded – dealer will give at least 4 attempts (in a 12 mos period) to repair until lemon law claim
→ Fixing time : dealer – support the client an alternative vehicle or daily means of transportation

Sample Cases (Consumer Protection Act)

1. DOH : Banned potassium bromate as ingredient for breads
→ Bromate – reports concerning safety
2. BFAD warned about the use of poisonous food colors in making bagoong and other products
3. Adulteration of hotdogs and similar products
→ Use of fillers (ex. Flour) to add bulk
4. Adulteration of rice
→ High grade mixed with lower grade
5. Sale of poultry products injected with water : heavier
6. Rose Bowl Canned Foods from Malaysia : suspended by customs
→ BFAD : decomposed; strong offensive odor; with foreign matter
7. 30M worth of mislabelled whiskey from a local liquor firm : Johnny Walker Whiskey
8. Royal Tri-Orange : Foreign Matter
SOURCE:
Novis Veteris. (2020, September 3). PART 1 THE CONSUMER PROTECTION ACT [Video file]. Retrieved October 1, 2020,
from https://www.youtube.com/watch?v=6Z2I7nBsB2g&t=8s
Novis Veteris. (2020, September 3). PART 2 THE CONSUMER PROTECTION ACT [Video file]. Retrieved October 1, 2020,
from https://www.youtube.com/watch?v=WEbK4CWebw4&t=3st

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