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Philippines Consumer Protection Law
What is Republic Act 7394?

Republic Act 7394 (RA 7394) is the "Consumer Act of the Philippines" which was promulgated on July 15, 1992. 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.

What are the objectives of the RA 7394 or otherwise known as "Consumer Act of the Philippines?

Protection of consumers against hazards to health and safety; Protection of consumers against deceptive, unfair and unconscionable sales acts and practices; ("unconscionable" means not right, not reasonable or not guided by conscience) 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 ("redress" means remedy or to set right <an undesirable or unfair situation>); Involvement of consumer representative in the formulation of social and economic policies.

What government agencies in the Philippines implement the "Consumer Act of the Philippine" and what are their areas of concern?

The following agencies implement the Consumer Act:

Department of Trade and Industry (DTI)

DTI handles the following areas of concern:

Consumer Products and Service Warranties Consumer Product Quality and Safety Deceptive, unfair and unconscionable sales acts and practices Price Tag Weights and measures (metrication) Labeling and Packaging Advertising and sales promotion Liability for Products and Services Service and repair shops

Department of Agriculture (DA)

Agricultural Products Quality and Safety Labelling and Packaging

Department of Education (DepEd)

Consumer education and information

Department of Health (DOH)

Food, drugs, cosmetics and devices and hazardous substances Quality and safety Price Tag Labelling and Packaging Advertising & Sales Promotion

Bangko Sentral ng Pilipinas (BSP)

Consumer credit transactions extended by banks and other financial intermediaries

Securities and Exchange Commission (SEC)

Credit facilities extended to consumers by financing companies

When is the Consumer Act applicable? The Act is applicable if:

the COMPLAINANT is a natural person; the SUBJECT of the violation is a consumer product or service; and the NATURE of the complaint is regarding any of the aforementioned concern

What is consumer product or service? 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. What should a consumer do if he/she has a complaint?

Identify the problem. Create a fair settlement. Would any of the following options do: money back (Refund)? product repair (Repair)? exchange or change item (Replace)? Gather documentation as much as you can regarding your complaint. Examples of documents you can gather are sales receipts, warranties, repair orders, contract/agreement, cancelled checks, or any document which will support the complaint. These documents will serve as your evidence or proof. Go back to the store or office where you made the purchase. Talk to the person who sold you the product or service. Be calm and accurate in telling the problem and what steps should be taken in order to solve the problem. If that person irritates you and doesn't help, talk to the supervisor or manager and tell your complaint. A huge percentage of consumer problems are resolved at this level. If you are not satisfied with the support, write a formal letter of complaint to the concerned government consumer protection agencies in the Philippines mentioned above. In the letter, indicate your name and address; the name and address of the establishment against whom you are complaining; the circumstances regarding the complaint including names, places and dates etc.. Enclose supporting documents such as official receipts, deed of sale and the like. And be prepared to make a personal appearance when called, especially during the mediation conference.

How long can a consumer file a complaint? Within 2 years starting from the time the consumer transaction happened (when the deceptive or unfair transaction took place). To whom does a consumer file a complaint? In the Provincial Office. The administrative complaint shall be filed in duplicate with the Provincial Office 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.
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. The civil/criminal action shall be filed with the appropriate regular courts (Municipal Trial Court/Regional Trial Court).

LAWS:
Consumer Warranties and Service Contracts
Whenever you buy merchandise, it comes with a warranty. This is a guarantee that it will serve the purpose it was purchased for - in other words, it will work. The two basic types of warranty are express and implied. An express warranty is a promise from the seller, either written, oral or in an ad, promising that the item will perform its function for a specified period. Whether the item purchased is new or used, an express warranty is a guarantee that the item will work. However, not all items come with an express warranty.

The law automatically provides the second type of warranty, the implied warranty. Implied warranties are a part of all retail sales of new and used consumer goods. Basically, the retailer of an item implies that the item will work properly and be of average grade and quality, as long as it is used for the purpose it was sold. For example, a refrigerator will keep stuff cool as long as you are not trying to cool the entire room, and a blender will blend as long as you are not blending rocks.

Whenever you buy something, it's important to get warranty specifics in writing. Find out what the warranty covers. Does it cover service fees if the item needs to be repaired? How long is the warranty? According to the Federal Trade Commission (FTC), an implied warranty can last as long as four years but the actual time period can vary according to the state.

Dealing with Warranty Breach
If a warranty is breached, get the item replaced or repaired by the seller. If that doesn't work, try resolving the dispute through mediation. If that fails you have the right to sue the manufacturer or seller. Service contracts cannot be canceled after you signed them, but according to the FTC, there is a cooling off period where under certain circumstances, you might be able to void a contract. Contact the Federal Trade Commission (FTC.gov) for information on the right way to approach your particular situation.

To file a complaint about a seller or manufacturer, you can contact the Federal Trade Commission, Consumer Product Safety Commission or call up your local prosecutor and ask for the consumer fraud division. If you were defrauded by a telephone solicitor or fell into a TV advertisers trap, the Federal Communications Commission is the place to turn for help.

Avoiding Scams
According to the book, "The Truth About Avoiding Scams" by Steve Weisman , scam artists always take advantage of whatever is happening at a particular place in time. In the wake of the housing bust of 2008, for example, there were a lot of phony foreclosure rescues that caused people to lose the equity in their house to so-called rescuers. There are also numerous scams involving the popular social websites, Facebook being one of the most popular and, thus, scam-prone. (If you want to save your home, avoid bogus offers and take matters into your own hands. Check out Avoiding Foreclosure Scams.) It also helps to use credit cards, not debit cards, for online shopping. Debit cards offer fewer protections. A debit card could give access to your entire checking and/or savings account.

Keeping an Eye on Scams
Closely review every item on your monthly bills. If there is a transaction you don't recognize, question the biller in writing. If you think a charge is fraudulent, also notify your card company in writing no later than 60 days after the charge appears. Customers should use a separate email account for their online shopping. This method helps avoid spam. Also, never respond to emails asking you to "confirm" recent transactions after you shop because they can be phishing scams.

Getting Your Facts
Under the Fair and Accurate Credit Transaction Act (FACTA) amendments to the federal Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer report, at your request, once every 12 months. Financial institutions use the information contained in this report to determine risk regarding bank accounts. Consumers usually find out about this report only after there has been negative information reported (mishandled accounts and so on).

Again, this report can be obtained annually for free from credit reporting agencies. It contains accounts opened in your name and checks ordered in your name. However, it is not the same as the free annual credit report. This report is a completely separate report that the mass majority of consumers only find out about after they have been declined by a financial institution to open a checking or savings account. The majority of banks and credit unions use the information contained in the report to approve, decline or determine what type of account if any can be opened at their financial institution. Consumers who have a negative report may not be able to open a checking or savings account for five years.

The Bottom Line
Finding out about the warranties of products we buy, reading service contracts, avoiding scams and obtaining a consumer report is part of the overall maintenance of our financial health. When we stay on top of these details, we are able to make better informed decisions and get more out of our hard earned money. There are many other acts worth learning about that apply in certain situations, including the Home Owner Protection Act, the Home Affordable Modification Program, the Fair Credit Reporting Act, the Electronic Funds Transfer Act, the Fair Debt Collection Act, and the Fair Credit Billing Act.