Consumer Protection Act (RA 7394)

Flashcards about the Consumer Protection Act (RA 7394), covering product quality and safety, deceptive and unconscionable sales practices, warranties, labeling, price tags, and the Lemon Law. These flashcards will help to study for the exam.

What is the Republic Act number of the Consumer Protection Act?

RA 7394

According to the Consumer Protection Act, what is the duty of the state regarding consumer product quality and safety?

Develop safety and quality standards for consumer products.

Which agencies are responsible for enforcing consumer product quality and safety?

Department of Health, Department of Agriculture, Department of Trade and Industry.

What action can departments take if a consumer product is found to be injurious, unsafe, or dangerous?

Order its recall, prohibition, or seizure from public sale or distribution.

What is the procedure when a consumer product is determined to be substandard or materially defective?

To notify the manufacturer, distributor, or seller and order them to give notice to the public and to distributors/retailers of the defect.

What remedies can a manufacturer, distributor, or seller be directed to offer to an injured person for a substandard product?

Bring the product into conformity, replace the product, refund the purchase price, and/or pay reasonable damages.

When is an act or practice deemed deceptive?

Whenever a producer, manufacturer, supplier, or seller, through concealment, false representation, or fraudulent manipulation, induces a consumer to enter into a sales or lease transaction.

When is an act or practice deemed unfair or unconscionable?

When the producer, manufacturer, distributor, supplier, or seller takes advantage of the consumer’s infirmity, ignorance, or illiteracy to induce a one-sided transaction.

What type of sales schemes are prohibited in the sale of consumer products?

Chain distribution plans or pyramid sales schemes.

What is required to conduct any home solicitation sale of any consumer product or service?

A permit from the Department (likely DTI).

During which hours may home solicitation sales be conducted?

Between 9:00 AM and 7:00 PM of each working day.

What representations are prohibited in a home solicitation sale?

The buyer has been specially selected; a survey, test, or research is being conducted; or the seller is making a special offer for a limited time.

Under what condition is a referral selling plan allowed?

When the seller executes a written undertaking granting compensation to the buyer for transactions consummated with referred persons.

What are the key provisions governing the sale of consumer products with a warranty?

Terms of express warranty, operative from moment of sale, and sales reports.

What must any seller or manufacturer who gives an express warranty do?

Set forth the terms in clear language and identify the warrantor; Identify the party to whom the warranty is extended.

How long do distributors have to make sales report to the corresponding parties involved?

Thirty (30) days from date of purchase, unless otherwise agreed upon.

Who is liable under the product warranty if the report is not made?

The distributor who failed to send the sales reports.

Who shall be subsidiarily liable under the warranty in the case of failure of both the manufacturer and distributor to honor the warranty?

The retailer.

What are the two designations of warranties?

Full warranty and limited warranty.

To meet the minimum requirements for a warranty, what shall the warrantor do?

Remedy the product within a reasonable time without charge; Permit the consumer to elect a refund or replacement if the product continues to malfunction after a reasonable number of attempts.

How long shall any implied warranty endure?

Sixty (60) days to One (1) year following the sale of new consumer products.

In case of breach of express warranty, what may the consumer elect?

The consumer may elect to have the goods repaired or the purchase price refunded by the warrantor.

In case of breach of implied warranty, what may the consumer do?

The consumer may retain the goods and recover damages, or reject the goods, cancel the contract, and recover from the seller the purchase price paid, including damages.

What are the minimum labeling requirements for consumer products?

Correct trade name or brand name, registered trademark, business name, the address of the manufacturer/importer/repacker, the general make or active ingredients, net quantity of contents, and country of manufacture.

What are the additional labeling requirements for food?

Expiry or expiration date, if applicable; whether the product is semi-processed, fully processed, etc.; nutritive value, if any; and whether ingredients are natural or synthetic.

When is a product exempt from labeling requirements?

If its labeling or advertising is false or misleading; if it is offered for sale under the name of another food; or if it is an imitation of another food without proper labeling.

What is a 'price tag'?

Any device indicating the retail price per unit or service.

What are the reasons why price tags are mandatory?

Provide buyers with information for comparison; discourage haggling; expedite transactions.

What are the penalties for violating price tag requirements?

Fine P200 - P5,000, Imprisonment 1 month - 6 months, and a second conviction shall carry with it the penalty of revocation of business permit and license.

What does the Lemon Law (RA10642) recognize?

Recognizes that a motor vehicle is a major consumer purchase or investment.

What refers to a 'brand new motor vehicle' under the Lemon Law?

A vehicle constructed entirely from new parts, never sold or registered, and covered by a manufacturer’s express warranty.

What refers to 'Motor vehicle' under the Lemon Law?

Any self Propelled, Four (4) wheeled road vehicle Designed to carry passengers.

What is the "Lemon Law rights period"?

Twelve (12) months after delivery or the first 20,000 kilometers, whichever comes first.

What causes are excluded from nonconformity under the Lemon Law?

Noncompliance by the consumer of warranty obligations, unauthorized modifications, abuse or neglect, and damage due to accident or force majeure.

After how many repair attempts can a consumer invoke rights under the Lemon Law?

At least four (4) separate repair attempts for the same complaint, and the issue remains unresolved.

Before availing legal remedies under the Lemon Law, what must the consumer do?

Notify the manufacturer, distributor, dealer, or retailer in writing of the unresolved complaint and the intention to invoke rights under the Act.

What compensation should the consumer get for the non-usage of the vehicle while under repair during the period of availment of the Lemon Law rights?

A reasonable daily transportation allowance or a service vehicle.

What information must be disclosed upon resale of a returned motor vehicle?

The vehicle was returned, the nature of the nonconformity, and the condition of the vehicle at the time of transfer.