ACYRFBT: Consumer Protection Act

Prohibited Acts on Warranty

The following acts are prohibited:

b) unreasonable delay by the local manufacturer or any person obligated under the warranty or guarantee in honoring the warranty;

Declaration of Basic Policy

It is the policy of the State to protect the interests of the consumer, promote his general welfare and to establish standards of conduct for business and industry. Towards this end, the State shall implement measures to achieve the following objectives:

1. protection against hazards to health and safety;

2. protection against deceptive, unfair and unconscionable sales acts and practices;

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; and

5. involvement of consumer representatives in the formulation of social and economic policies.

Construction of the Consumer Protection Act

The best interest of the consumer shall be considered in the interpretation and implementation of the provisions of this Act, including its implementing rules and regulations.

Department of Trade and Industry

It is the implementing agency of the Consumer Protection Act.

Declaration of Policy - Protection Against Deceptive, Unfair and Unconscionable Sales Acts or Practices

The State shall 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.

Deceptive Sales Acts or Practices

Exists whenever the producer, manufacturer, supplier or seller, through concealment, false representation of fraudulent manipulation, induces a consumer to enter into a sales or lease transaction of any consumer product or service.

Deceptive Sales Acts or Practices

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;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

b) a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is not;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

c) a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered, reconditioned, reclaimed or second-hand state;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

d) a consumer product or service is available to the consumer for a reason that is different from the fact;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

e) a consumer product or service has been supplied in accordance with the previous representation when in fact it is not;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

f) a consumer product or service can be supplied in a quantity greater than the supplier intends;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

g) a service, or repair of a consumer product is needed when in fact it is not;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

h) a specific price advantage of a consumer product exists when in fact it does not;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

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;

Deceptive Sales Acts or Practices

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

j) the seller or supplier has a sponsorship, approval, or affiliation he does not have.

True

(True or False) 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.

Unfair or Unconscionable Sales Act or Practice

Happens whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer's physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer, distributor, supplier or seller.

Unfair or Unconscionable Sales Act or Practice

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;

Unfair or Unconscionable Sales Act or Practice

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

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;

Unfair or Unconscionable Sales Act or Practice

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

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

Unfair or Unconscionable Sales Act or Practice

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

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;

Unfair or Unconscionable Sales Act or Practice

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

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.

True

(True or False) An unfair or unconscionable sales act or practice by a seller or supplier in connection with a consumer transaction violates this Chapter whether it occurs BEFORE, DURING or AFTER the consumer transaction.

Chain Distribution Plans or Pyramid Sales Schemes

Means sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer of his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments: Provided, That the profits of the person employing such a plan are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit: Provided, further, That the limitation on the number of participants does not change the nature of the plan.

True

(True or False) Chain distribution plans or pyramid sales schemes shall not be employed in the sale of consumer products.

Home Solicitation Sales

Means consumer sales or leases which are personally solicited by any person or organization by telephone, person-to-person contact or by written or printed communication other than general advertising or consummated at the buyer's residence or a place of business, at the seller's transient quarters, or away from a seller's regular place of business.

True

(True or False) No business entity shall conduct any home solicitation sale of any consumer product or service without first obtaining a permit from the Department of Trade and Industry.

9:00AM to 7:00PM of Each Working Day

The allowed time duration of a home solicitation sale.

True

(True or False) That solicitation sales may be made at a time other than the prescribed hours where the person solicited has previously agreed to the same.

True

(True or False) Home solicitation sales shall only be conducted by a person who has the proper identification and authority from his principal to make such solicitations.

True

(True or False) Sales generated from home solicitation sales shall be properly receipted as per existing laws, rules and regulations on sale transactions.

Prohibited Representation - Home Solicitation Sale

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.

Referral Sales

Means the sales device employed by the sellers wherein the buyer is induced to acquire goods or services by representing that after the acquisition of the goods or services, he will receive a rebate, commission or other benefit in return for the submission of names of potential customers or otherwise helping the seller enter into other sales, if the receipt of such benefit is contingent on an event occurring after the sale is made.

True

(True or False) Referral selling plans shall not be used in the sale of consumer products. Exceptionally, when 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.

P5,000 to P10,000

The fine imposable upon the violation of the Consumer Protection Act.

Not More than 1 Year

The imprisonment period imposable upon the violation of the Consumer Protection Act.

Declaration of Policy - Labeling and Fair Packaging

The State shall enforce compulsory labeling, and fair packaging to enable the consumer to obtain accurate information as to the nature, quality and quantity of the contents of consumer products and to facilitate this comparison of the value of such products.

Department of Trade and Industry

The implementing agency responsible for imposing the compulsory labeling and fair packaging requirements. Provided, That with respect to food, drugs, cosmetics, devices and hazardous substances, it shall be enforced by the concerned department.

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 hereof.

Prohibited Acts on Labeling and Packaging

The prohibition 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.

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;

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:

b) its duly registered trademark;

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:

c) its duly registered business name;

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:

d) the address of the manufacturer, importer, repacker of the consumer product in the Philippines;

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:

e) its general make or active ingredients;

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:

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;

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:

g) country of manufacture, if imported;

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:

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

Minimum Labeling Requirements for Consumer Products

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;

Minimum Labeling Requirements for Consumer Products

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

b) directions for use, if necessary;

Minimum Labeling Requirements for Consumer Products

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

c) warning of toxicity;

Minimum Labeling Requirements for Consumer Products

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

d) wattage, voltage or amperes;

Minimum Labeling Requirements for Consumer Products

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

e) process of manufacture used if necessary.

Philippine Product Standard Mark

Shall be contained on any label, if such label is certified to have passed the consumer product standard prescribed by the concerned department.

Authority of the Concerned Department to Provide for Additional Labeling and Packaging Requirements

Whenever the concerned department determines that regulations containing requirements other than those in the Minimum Labelling Requirements above are necessary to prevent the deception of the consumer or to facilitate value comparisons as to any consumer product, it may issue such rules and regulations to:

a) establish and define standards for characterization of the size of a package enclosing any consumer product which may be used to supplement the label statement of net quality, of contents of packages containing such products but this clause shall not be construed as authorizing any limitation on the size, shape, weight, dimensions, or number of packages which may be used to enclose any product;

Authority of the Concerned Department to Provide for Additional Labeling and Packaging Requirements

Whenever the concerned department determines that regulations containing requirements other than those in the Minimum Labelling Requirements above are necessary to prevent the deception of the consumer or to facilitate value comparisons as to any consumer product, it may issue such rules and regulations to:

b) regulate the placement upon any package containing any product or upon any label affixed to such product of any printed matter stating or representing by implication that such product is offered for retail at a price lower than the ordinary and customary retail price or that a price advantage is accorded to purchases thereof by reason of the size of the package or the quantity of its contents;

Authority of the Concerned Department to Provide for Additional Labeling and Packaging Requirements

Whenever the concerned department determines that regulations containing requirements other than those in the Minimum Labelling Requirements above are necessary to prevent the deception of the consumer or to facilitate value comparisons as to any consumer product, it may issue such rules and regulations to:

c) prevent the nonfunctional slack-fill of packages containing consumer products.

Nonfunctionally Slack-Filled Package

Is deemed if a package is filled to substantially less than its capacity for reasons other than:

1. protection of the contents of such package,

2. the requirements of machines used for enclosing the contents in such package, or

3. inherent characteristics of package materials or construction being used.

Special Packaging of Consumer Products for the Protection of Children

The concerned department may establish standards for the special packaging of any consumer product if it finds that:

a) the degree or nature of the hazard to children in the availability of such product, by reason of its packaging, is such that special packaging is required to protect children from serious personal injury or serious illness resulting from handling and use of such product;

Special Packaging of Consumer Products for the Protection of Children

The concerned department may establish standards for the special packaging of any consumer product if it finds that:

b) the special packaging to be required by such standard is technically feasible, practicable and appropriate for such product. In establishing a standard under this Article, the concerned department shall consider:

1. the reasonableness of such standard;

2. available scientific, medical and engineering data concerning special packaging and concerning accidental, ingestions, illnesses and injuries caused by consumer product;

3. the manufacturing practices of industries affected by this Article; and

4. the nature and use of consumer products.

Additional Labeling Requirements - Food

Labeling requirements include:

a) expiry or expiration date, where applicable;

b) whether the consumer product is semi-processed, fully processed, ready-to-cook, ready-to-eat, prepared food or just plain mixture;

c) nutritive value, if any;

d) whether the ingredients used are natural or synthetic, as the case may be;

e) such other labeling requirements as the concerned department may deem necessary and reasonable.

Additional Labeling Requirements - Cosmetics

Labeling requirements include:

a) expiry or expiration date;

b) whether or not it may be an irritant;

c) precautions or contra-indications; and

d) such other labeling requirements as the concerned department may deem necessary and reasonable.

Additional Labeling Requirements - Cosmetics

Labeling requirements include:

The Generics Act shall apply

Additional Labeling Requirements - Cigarettes

Labeling requirements include:

All cigarettes for sale or distribution within the country shall be contained in a package which shall bear the following statement or its equivalent in Filipino: "Warning" Cigarette Smoking is Dangerous to Your Health". Such statement shall be located in conspicuous place on every cigarette package and shall appear in conspicuous and legible type in contrast by typography, layout or color with other printed matter on the package. Any advertisement of cigarette shall contain the name warning as indicated in the label.

Mislabeled Food

A food shall also be deemed mislabeled: a) if its labeling or advertising is false or misleading in any way;

Mislabeled Food

A food shall also be deemed mislabeled: b) if it is offered for sale under the name of another food;

Mislabeled Food

A food shall also be deemed mislabeled: c) if it is an imitation of another food, unless its label bears in type of uniform size and prominence, the word "imitation" and, immediately thereafter, the name of the food imitated;

Mislabeled Food

A food shall also be deemed mislabeled: d) its containers is so made, formed, or filled as to be misleading;

Mislabeled Food

A food shall also be deemed mislabeled: e) if in package form unless it bears a label conforming to the requirements of this Act: Provided, That reasonable variation on the requirements of labeling shall be permitted and exemptions as to small packages shall be established by the regulations prescribed by the concerned department of health;

Mislabeled Food

A food shall also be deemed mislabeled: f) if any word, statement or other information required by or under authority of this Act to appear on the principal display panel of the label or labeling is not prominently placed thereon with such conspicuousness as compared with other words, statements, designs or devices in the labeling and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use;

Mislabeled Food

A food shall also be deemed mislabeled: g) if it purports to be or is represented as a food for which a definition or standard of identity has been prescribed unless:

1. it conforms to such definition and standard; and

2. its labels bears the name of the food specified in the definition or standards, and insofar as may be required by such regulations, the common names of optional ingredients other than spices, flavoring and coloring, present in such food;

Mislabeled Food

A food shall also be deemed mislabeled: h) if it purports to be or represented as:

1. a food for which a standard of quality has been prescribed by regulations as provided in this Act and its quality fall below such standard, unless its label bears in such manner and form as such regulations specify, a statement that it falls below such standard; or

2. a food for which a standard or standards or fill of container have been prescribed by regulations as provided by this Act and it falls below the standard of fill of container applicable thereto, unless its label bears, in such manner and form as such regulations specify, a statement that it falls below such standard;

Mislabeled Food

A food shall also be deemed mislabeled: if it is not subject to the provisions of paragraph (g) of this Article unless its label bears:

1. the common or usual name of the food, if there be any; and

2. in case it is manufactured or processed from two or more ingredients, the common or usual name of such ingredient; except the spices, flavorings and colorings other than those sold as such, may be designated as spices, flavorings and colorings without naming each: Provided, That to the extent that compliance with the requirement of clause (2) of this paragraph is impracticable or results in deception or unfair competition, exemptions shall be established by regulations promulgated by the concerned department of health;

Mislabeled Food

A food shall also be deemed mislabeled: j) if it purports to be or is represented for special dietary uses, unless its label bears such information concerning its vitamin or mineral or other dietary properties as the concerned department determines to be, or by regulations prescribed as necessary in order fully to inform purchasers as its value for such uses;

Mislabeled Food

A food shall also be deemed mislabeled: k) if it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless it bears labeling, stating that fact: Provided, That to the extent that compliance with the requirements of this paragraph is impracticable, exemptions shall be established by regulations promulgated by the concerned department. The provisions of this paragraph or paragraphs (g) and (i) with respect to the artificial coloring shall not apply in the case of butter, cheese or ice cream.

Mislabeled Cosmetics

A cosmetic shall be deemed mislabeled: a) if its labeling or advertising is false or misleading in any way;

Mislabeled Cosmetics

A cosmetic shall be deemed mislabeled: b) if in package form unless it bears a label conforming to the requirements of labeling provided for in this Act or under existing regulations: Provided, That reasonable variations shall be permitted, and exemptions as to small packages shall be established by regulations prescribed by the concerned department;

Mislabeled Cosmetics

A cosmetic shall be deemed mislabeled: c) if any word, statement or other information required by or under authority of this Act to appear on the label or labeling is not prominently placed thereon with such conspicuousness, as compared with other words, statements, designs or devices in the labeling, and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use;

Mislabeled Cosmetics

A cosmetic shall be deemed mislabeled: d) if its container is so made, formed or filled as to be misleading;

Mislabeled Cosmetics

A cosmetic shall be deemed mislabeled: e) if its label does not state the common or usual name of its ingredients.

Regulation-making Exemptions

The concerned department may promulgate regulations exempting from any labeling requirements of this Act food, cosmetics, drugs or devices which are, in accordance with the practice of trade, to be processed, labeled or repacked in substantial quantities at establishments other than those where originally processed, labeled or packed on condition that such food, cosmetics, drugs or devices are not adulterated or mislabeled under the provisions of this Act and other applicable laws upon approval from such processing, labeling and repacking establishments.

Fine of P500 - P20,000 or Imprisonment of 3 months - 2 years, or both

Penalties imposed upon violations on Food/Cosmetic/Drug/Device/Hazardous Substance.

Fine of P200 - P5,000 or Imprisonment of 1 month - 1 year, or both

Penalties imposed upon violations on other matters.

Department of Trade and Industry

Implementing agency that imposes consumer product and service warranty.

True

(True or False) The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties.

Terms of Express Warranty

Any seller or manufacturer who gives an express warranty shall:

1. set forth the terms of warranty in clear and readily understandable language and clearly identify himself as the warrantor;

2. identify the party to whom the warranty is extended;

3. state the products or parts covered;

4. state what the warrantor will do in the event of a defect, malfunction of failure to conform to the written warranty and at whose expense;

5. state what the consumer must do to avail of the rights which accrue to the warranty; and

6. stipulate the period within which, after notice of defect, malfunction or failure to conform to the warranty, the warrantor will perform any obligation under the warranty.

Express Warranty

Is operative from moment of sale. All written warranties or guarantees issued by a manufacturer, producer, or importer shall be operative from the moment of sale.

Within Thirty (30) Days from Date of Purchase

The number of days within which all sales made by distributors of products covered by this Article shall be reported to the manufacturer, producer, or importer of the product sold.

Sales Report

The report shall contain, among others, the date of purchase, model of the product bought, its serial number, name and address of the buyer. The report made in accordance with this provision shall be equivalent to a warranty registration with the manufacturer, producer, or importer. Such registration is sufficient to hold the manufacturer, producer, or importer liable, in appropriate cases, under its warranty.

Failure to Make or Send Sales Report

Shall relieve the manufacturer, producer, or importer of its liability under the warranty: Provided, however, That the distributor who failed to comply with its obligation to send the sales reports shall be personally liable under the warranty. For this purpose, the manufacturer shall be obligated to make good the warranty at the expense of the distributor.

Retailer

Shall be subsidiarily liable under the warranty in case of failure of both the manufacturer and distributor to honor the warranty. In such case, he shall shoulder the expenses and costs necessary to honor the warranty. Nothing therein shall prevent proceeding against the distributor or manufacturer.

Enforcement of Warranty or Guarantee

The warranty rights can be enforced by presentment of a claim. To this end, the purchaser needs only to present to the immediate seller either the warranty card or the official receipt along with the product to be serviced or returned to the immediate seller.

Warranty Card, Official Receipt, and Along with the Product to be Services or Returned

The following items to be shown by the buyer in order to enforce warranty or guarantee. The following shall be sent to the immediate seller.

True

(True or False) If the immediate seller is the manufacturer's factory or showroom, the warranty shall immediately be honored. If the product was purchased from a distributor, the distributor shall likewise immediately honor the warranty. In the case of a retailer other than the distributor, the former shall take responsibility without cost to the buyer of presenting the warranty claim to the distributor in the consumer's behalf.

True

(True or False) Distributors and retailers covered by this Article shall keep a record of all purchases covered by a warranty or guarantee for such period of time corresponding to the lifetime of the product's respective warranties or guarantees.

Full Warranty

Is designated when the written warranty meets the minimum requirements set forth in paragraph (d);

Limited Warranty

Is designated if the written warranty does not meet such minimum requirements.

Minimum Standards for Warranties

For the warrantor of a consumer product to meet the minimum standards for warranty, he shall:

1. remedy such consumer product within a reasonable time and without charge in case of a defect, malfunction or failure to conform to such written warranty;

2. permit the consumer to elect whether to ask for a refund or replacement without charge of such product or part, as the case may be, where after reasonable number of attempts to remedy the defect or malfunction, the product continues to have the defect or to malfunction.

True

(True or False) The warrantor will not be required to perform the minimum standards for warranties, if he can show that the defect, malfunction or failure to conform to a written warranty was caused by damage due to unreasonable use thereof.