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Enabling Business, Empowering Consumers

BACKGROUNDER ON
THE CONSUMER ACT
OF THE PHILIPPINES
(R.A. 7394)

Series of 2013
Enabling Business,
Empowering Consumers

Q1: WHAT IS R.A. 7394?


Answer:
R. A. 7394, is the Consumer Act of the Philippines,
which took effect on 15 July 1992

Q2: STATE CLEARLY THE DECLARATION


OF BASIC POLICY
Answer:
It is the policy of the State to protect the interest of the
consumer, promote his general welfare and to establish
standards of conduct for business and industry.
Enabling Business,
Empowering Consumers

Q3. WHAT ARE THE OBJECTIVES OF THE


CONSUMER ACT?
Answer:
◊ Protection of consumers against hazards to health
and safety;
◊ Protection of consumers against deceptive, unfair and
unconscionable sales acts and practices;
◊ Provision of information and education to facilitate
sound choice and the proper exercise of rights by the
consumer;
◊ Provision of adequate rights and means of redress
◊ Involvement of consumer representative in the
formulation of social and economic policies.
Enabling Business,
Empowering Consumers

Q4. WHICH GOVERNMENT AGENCIES IMPLEMENT


THE CONSUMER ACT AND WHAT ARE THEIR
CONCERN?
Department of Trade and Industry (DTI)
◊ Consumer Product Quality and Safety
◊ Deceptive, unfair and unconscionable sales acts and
practices
◊ Weights and measures (metrication)
◊ Consumer Products and Service Warranties
◊ Price Tag
◊ Labeling and Packaging
◊ Liability for Products and Services
◊ Service and repair shops
◊ Advertising and sales promotion
Enabling Business,
Q4. Which government agencies…page 2 Empowering Consumers

Department of Agriculture Bangko Sentral ng Pilipinas (BSP)


◊ Agricultural Products ◊ Consumer Credit
◊ Quality and Safety Transactions extended by
◊ Labeling and Packaging banks and other financial
intermediaries
Department of Education (DepEd)
◊ Consumer Education in Schools Securities and Exchange
Commission (SEC)
Department of Health (DOH)
◊ Credit facilities extended to
◊ Food, Drugs, Cosmetics and
Devices and Hazardous Substances
consumers by financing
companies
◊ Quality and Safety
◊ Labeling and Packaging Local Government Units (LGU)
◊ Advertising and sales ◊ Short weighing scales,
promotion management operations of
◊ Price Tag businesses in their
locality/municipality
Enabling Business,
Empowering Consumers

Q5. WHEN IS THE CONSUMER ACT APPLICABLE?


Answer:
◊ if the COMPLAINANT is a natural person;
◊ if the SUBJECT if the violation is a consumer product or service; and
◊ if the NATURE of the complaint is regarding any of the
aforementioned concerns

Q6. WHAT IS A CONSUMER PRODUCT OR SERVICE?


Answer:
Consumer product or service means goods, service and credits, debts
or obligations which are primarily for personal, family, household or
agricultural purpose, which shall include, but not limited to food, drugs,
cosmetics and devices.
Enabling Business,
Empowering Consumers

Q7. WHAT IS THE PERIOD FOR FILING


CONSUMER COMPLAINTS?
Answer:
Within 2 years from the time the consumer transaction was
consummated or the deceptive or unfair and unconscionable act
or practice was committed,, and in case of hidden defects, from
discovery thereof.

Q8. WHERE CAN A CONSUMER COMPLAINT


BE FILED?
Answer:
The administrative complaint shall be filed in the duplicate with the
Provincial Office of the Department having jurisdiction over the
subject of the complaint in areas where there are no Provincial
Offices, the complaint shall be filed in the Regional Office.
Enabling Business,
Empowering Consumers
Q8. Where can a consumer
complaint be filed…page 2
◊ In cases where the complainant and respondent are
situated in different provinces, the complainant has the
option to choose the place where to file the complaint.

◊ In National Capital Region (NCR) the complaints shall be


filed with the following offices:
◊ For the Department of Trade and Industry - DTI-NCR
◊ For the Department of Health - FDA
◊ For the Department of Agriculture - DA
◊ For the Securities and Exchange Commission - SEC
◊ For the Bangko Sentral ng Pilipinas - BSP

◊ The civil/criminal action shall be filed with the


appropriate regular courts (Municipal/Regional Trial Courts).
Enabling Business,
Empowering Consumers

Q9. WHAT ARE THE REMEDIES AVAILABLE


TO CONSUMERS?

For Administrative Proceedings:


◊ replacement or repair of product or services
◊ refund of payment made
◊ restitution or rescission of contract
◊ reimbursement to complainant of amount spent in
pursuing the complaint
Enabling Business,
Empowering Consumers
Q9. What are the remedies available
to the consumers…page 2

For civil/criminal action


◊ civil action
◊ award of damages
◊ replacement or repair of product or services
◊ refund of payment made
◊ restitution or rescission of contract
◊ reimbursement to complainant of amount spent in pursuing the
complaint

◊ criminal action-defendant, if found guilty by the court, can


be sentenced to imprisonment or payment of fine or
both, at the discretion of the court.
Enabling Business,
Empowering Consumers

Q10. WHAT ARE THE ADVANTAGES OF FILING


COMPLAINT BEFORE THE IMPLEMENTING
AGENCIES (ADMINISTRATIVE PROCEEDINGS)
Answer:

◊ Mediation/Arbitration is more economical and time-saving

◊ Complainant need not undergo the rigors and expense of a court case
Enabling Business,
Empowering Consumers

Q11. WHAT ADMINISTRATIVE PENALITIES CAN BE


IMPOSED UPON ESTABLISHMENTS FOUND
TO HAVE VIOLATED ANY OF THE LAWS
COVERED BY THE CONSUMER ACT?

◊ The issuance of a cease and desist order,


Provided, However, That such order shall
specify the acts that respondent shall cease
from and shall require him to submit a report of
compliance therewith within a reasonable time.
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Empowering Consumers
Q11. What administrative penalties…page 2

◊ The acceptance of a voluntary assurance of compliance or


discontinuance from the respondent which may include any or all the
following terms and conditions:
◊ an assurance to comply with the provisions of this Act and its
implementing rules and regulations;
◊ an assurance to refrain from engaging in unlawful acts and practices or
unethical trade practices subject of the formal investigation;
◊ an assurance to comply with the terms and conditions specified in the
consumer transaction subject of the complaint;
◊ an assurance to recall, replace, repair or refund the money value of
defective products distributed in commerce;
◊ an assurance to reimburse the complainant out of any money or
property in connection with the complaint, including expenses in
making or pursuing the complaint, if any, and to file a bond to
guarantee compliance herewith.
Enabling Business,
Empowering Consumers
Q11. What administrative penalties…page 3

◊ Restitution or rescission of the contract without damages;

◊ Condemnation and seizure of the consumer product found to be


hazardous to health and safety, unless the respondent files a
bond to answer for any damages or injury that may arise from
the continued use of the product;

◊ The imposition of administrative fines in such amount as deemed


reasonable by the Secretary, which shall in no case be less than
Five Hundred Pesos (P500.00) nor more than Three Hundred
Thousand Pesos (P300,000.00) depending on the gravity of the
offense, and an additional fine of not more than One Thousand
Pesos (P1,000.00) for each day of continuing violation.
Enabling Business,
Empowering Consumers

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