Consumers Act of the Philippines

• Republic Act No. 7394, or the Consumers Act of the Philippines, was enacted on April 13, 1992
• It aims to protect consumer interests, promote general welfare, and establish conduct standards for business and industry.
• The best consumer practices are prioritized in the interpretation and implementation of this Act.

Objectives

• Protection against health and safety hazards
• Protection against deceptive and unconscionable sales practices
• Providing information and education for sound choices and rights
• Ensuring adequate means of redress
• Involving consumers in formulating social and economic policies

State Duties

• Developing safety and quality standards for consumer products, including performance standards and testing methods
• Assisting consumers in evaluating product quality, safety, performance, and utility
• Protecting the public from unreasonable risks associated with consumer products
• Researching product quality improvement and investigating product-related deaths, illnesses, and injuries
• Ensuring consistency of standardized products

Implementing Agencies

• Department of Health (DOH) handles food, drugs, cosmetics, devices, and substances
• Department of Agriculture (DA) regulates products related to agriculture
• Department of Trade and Industry (DTI) oversees other consumer products not specified above

Consumer Product Quality and Safety Standards

• Requirements related to performance, composition, contents, design, construction, finish, and packaging
• Specifications for kind, class, grade, dimensions, weights, and material
• Methods for sampling, testing, and codes used to check product quality
• Precautions for storage, transporting, and packaging
• Clear and adequate safety warnings or instructions on the consumer product

Deceptive Sales Act or Practices

• Deceptive acts occur when a producer, manufacturer, supplier, or seller uses concealment, false representation, or fraudulent manipulation to induce a consumer into a sales or lease transaction

False Representations

• A product or service is misrepresented to have sponsorship, approval, performance, characteristics, ingredients, accessories, uses, or benefits it lacks
• A product or service is misrepresented regarding its standard, quality, grade, style, or model
• A product is falsely claimed as new, original, or unused when it is deteriorated, altered, reconditioned, reclaimed, or second-hand
• Misleading claims about the reasons a product/service is available, prior supply conditions, or quantity available

Misleading Price and Necessity Claims

• Claiming a specific price advantage that doesn't exist
• Claiming a service or repair is needed when it is not

False Warranty and Affiliation Claims

• False claims about warranties, disclaimers, warranty terms, rights, remedies, or obligations
• False claims of sponsorship, approval, or affiliation

Warranty Definition

• A guarantee by a manufacturer regarding the condition of their product
• Outlines terms and situations for repairs or exchanges if the product malfunctions

Implementing Agency

• Department of Trade and Industry strictly enforces warranty provisions and regulations (Article 66)

Applicable Law

• Civil Code provisions on conditions and warranties govern contracts of sale with conditions and warranties (Article 67)

Additional Provisions

• Governs consumer product sales with warranty, in addition to Civil Code provisions (Article 68)

Terms of Express Warranty

• Must be clearly written and easily understood, with clear identification of the warrantor
• Must identify who the warranty extends to
• Must state which products or parts are covered
• Must detail what the warrantor will do in case of defect or failure, and at whose expense
• Must explain what the consumer must do to claim their warranty rights
• Must specify the period for the warrantor to fulfill obligations after notice of defect

When Warranties are Operative

• All written warranties/guarantees from manufacturers, producers, or importers take effect from the moment of sale

Regulatory Measures Summary

• Distributors must report all sales to the manufacturer/producer/importer within 30 days, including product details, for warranty registration
• Failure to report relieves the manufacturer of liability, shifting it to the distributor
• If both manufacturer and distributor fail to honor a warranty, the retailer is subsidiarily liable
• Buyers only need to present the product and claim, without extra documents
• Distributors must immediately honor warranties
• Retailers must assist buyers in filing claims with distributors

Record Keeping

• Distributors and retailers must keep purchase records for the product's warranty duration

Contrary Stipulations

• All stipulations contrary to this article are null and void

Designation of Warranties

• Written warranties must be clearly designated as either "Full warranty" if minimum requirements are met, or "Limited warranty" if not

Minimum Standards

• If a product is defective, malfunctions, or does not meet the warranty standards, the seller/manufacturer must repair or remedy the defect within a reasonable time and free of charge
• If defects persist after multiple repair attempts, the consumer chooses between a refund or replacement, at no cost

Damage Caused by Unreasonable Use

• The seller/manufacturer is not responsible for repairs, replacements, or refunds

Duration

• The express warranty period is determined by both parties
• If an express warranty includes an implied warranty of merchantability, they will both last for the same duration
• All other implied warranties for new consumer products last anywhere from 60 days to 1 year

Consequences of Breach

• In a breach of express warranty, consumers can opt for either a repair or a refund
• Repairs must be completed within 30 days, unless delays occur due to uncontrollable factors
• Refunds will have deductions based on prior use before the defect was discovered

Breach of Implied Warranty

• Consumers can either keep the goods and claim damages, or reject the goods

Warranty in Supply of Services

• Service contracts require the seller to provide services with reasonable care and skill
• Materials used must be reasonably fit for their intended purpose

Implied Warranty for Specific Purposes

• If a consumer expressly or implicitly states the purpose of the service, the seller guarantees the service and materials will be fit for that purpose

Is the Provision of This Act Applicable to Professional Services?

• No, the provisions of this Act are not applicable to professional services

Guaranty of Service Firms

• Service firms must guarantee workmanship and replacement parts for at least 90 days, indicated on invoices

Prohibited Acts

• Refusal to honor a warranty or guarantee, without valid legal cause, is prohibited
• Unreasonable delays by local manufacturers
• Removing a product's warranty card to evade warranty obligations is prohibited
• False advertising relating to warranty or guarantee is prohibited

Labeling and Packaging

• Labeling and fair packaging helps consumers make correct assumptions about the products they intend to buy
• The purpose of labelling is to enable consumers to obtain accurate information about the nature, quality, and quantity of the contents of consumer products and to facilitate comparison of the value of such products.
• This protects consumer interests, promote their general welfare, and establish standards of conduct for business and industry

Implementing Agency

• The DTI enforces labeling and packaging regulations
• Food, drugs, cosmetics, devices, and hazardous substances are regulated by the relevant departments
• The Philippine Consumer Act (RA 7394) and Philippine National Standards (PNS) outlines labeling requirements
• The BPS develops and enforces the said standards

Acts prohibited on labeling and packing

• Selling or distributing products with non-compliant labels.
• Engaging in deceptive packaging.

Minimum labeling requirements for consumer products

• Correct and registered trade name or brand name
• Registered trademark
• Registered business name
• Address of the manufacturer, importer, or repacker in the Philippines
• General make or active ingredients
• Net quality of contents by weight, measure, or numerical count in the metric system
• Country of manufacture if imported
• State that the products are manufactured, refilled, or repacked under license from a principal

Additional Requirements for Labeling

• Flammability
• Directions for usage
• Warnings
• Toxicity
• Wattage, voltage or amperes
• Process of manufacture used

Mark on the Label

• Only products with the Philippine Product Standard Mark can have the said mark on the label

Additional Labeling and Packaging Requirements

• Issued by DTI to prevent deception of consumers or facilitate value comparison
• Rules may be issued to set standards for package sizes and placement of information on packages

Mislabeled food

• If the food is labelled and advertised falsely