Title
Aowa Electronic Philippines, Inc. vs. Department of Trade and Industry
Case
G.R. No. 189655
Decision Date
Apr 13, 2011
AOWA faced 273 consumer complaints for deceptive sales practices, including false gift claims and pressure tactics. DTI imposed penalties, upheld by courts, for violating the Consumer Act, leading to nationwide business closure and fines.
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Case Digest (G.R. No. 189655)

Facts:

Background of the Case:

  • AOWA Electronic Philippines, Inc. (AOWA) was the subject of multiple consumer complaints filed with the Department of Trade and Industry (DTI).
  • From 2001 to 2007, at least 273 complaints were lodged against AOWA, alleging deceptive and unfair sales practices.

Details of the Sales Scheme:

  • AOWA’s representatives approached potential customers in malls, informing them they had won a gift or giveaway.
  • Customers were told they could only claim the gift upon purchasing additional products, which were misrepresented as high-quality but were allegedly overpriced.
  • Customers were often surrounded by AOWA’s representatives, a tactic referred to as “ganging up,” and pressured into purchasing the products.
  • In some cases, customers were accompanied to ATMs or their homes to secure payment.

DTI’s Action:

  • DTI-NCR filed a Formal Charge against AOWA for violations of Articles 50 and 52 of the Consumer Act of the Philippines.
  • A Preventive Measure Order (PMO) was issued to stop AOWA’s practices until a Sales Promotion Permit was secured.
  • AOWA denied the allegations, claiming the complaints were based on assumptions and had been amicably settled. It also argued that most complaints were barred by prescription.

Adjudication Officer’s Decision:

  • On April 10, 2008, the Adjudication Officer found AOWA liable for violating the Consumer Act.
  • The officer ordered AOWA to:
    1. Cease and desist from operating its business nationwide.
    2. Cancel its Certificates of Business Name Registration.
    3. Refund affected consumers.
    4. Pay a one-time administrative fine of P300,000.

Appeals and CA Decision:

  • AOWA appealed to the DTI Appeals Committee, which upheld the Adjudication Officer’s decision.
  • The Court of Appeals (CA) affirmed the DTI’s ruling, emphasizing AOWA’s deceptive practices and failure to secure a Sales Promotion Permit.

Issue:

  1. Whether the CA erred in ruling that the DTI had sufficient basis to file the Formal Charge against AOWA, despite claims that the complaints were settled and lacked concrete evidence.
  2. Whether the CA erred in affirming the DTI’s decision to impose harsh penalties, including the permanent closure of AOWA’s business and the maximum fine.
  3. Whether the CA erred in allowing the DTI’s resolution to be enforced nationwide, despite the complaints being limited to the National Capital Region (NCR).

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


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