QuestionsQuestions (DTI DEPARTMENT ADMINISTRATIVE ORDER NO. 7, S. 1999)
It is intended to provide the schedule and rules for imposing administrative fines for violations of certain trade and consumer laws, anchored on Title X, Book IV of E.O. 292 (Administrative Code of 1987), Article 164(e) of R.A. 7394 (Consumer Act), Section 6(e) of E.O. 913, and Section 10(9) of R.A. 7581 (Price Act).
It covers administrative fines for violations involving R.A. 7394 (Consumer Act) including price tag/metrication/labeling/advertising and deceptive sales practices, certain warranty and product/service safety provisions; R.A. 7581 (Price Act); E.O. 913 specifically: R.A. 71 (Price Tag Law), Act No. 3883 as amended (Business Name Law), Act No. 2728 as amended by Acts 3715 & 3969 (Law on Brokerage), R.A. 3952 (Bulk Sales Law), and Act No. 3893 (Bonded Warehouse Act).
In case of doubt, the Order must be interpreted taking into consideration the best interest of consumers.
The administrative fine for violation of the Consumer Act is deemed reasonable by the Secretary, but not less than PHP 500.00 nor more than PHP 300,000.00, depending on the gravity of the offense, plus an additional fine of not more than PHP 1,000.00 for each day of continuing violation.
Among others: Price Tag, Metrication, Advertising and Sales Promotion, Labeling and Fair Packaging, Deceptive/Unfair/Unconscionable Sales Act and Practices (including Home Solicitation, Referral Sales, Chain Distribution, and other deceptive practices), Consumer Product and Service Warranties, Liability for Products and Services, Regulation of Repair and Service Firms, and Product Quality & Safety.
Basic fine under Schedule I: Retailer PHP 500.00; Wholesaler PHP 1,000.00; Manufacturer PHP 2,000.00.
Schedule II basic fine: Retailer PHP 500.00; Wholesaler PHP 1,000.00; Manufacturer PHP 2,000.00—same basic fine amounts as Schedule I, but the minimum/medium/maximum ranges differ.
The activity corresponding to the higher penalty (higher fine) is used as the basis in imposing the appropriate fine.
The fine is deemed reasonable by the Secretary, with a statutory/administrative range not less than PHP 500.00 nor more than PHP 150,000.00, considering the surrounding circumstances.
Schedule III provides basic fine amounts and ranges (minimum, medium, maximum) depending on whether the respondent is retailer/wholesaler/manufacturer. The selection of minimum/medium/maximum depends on the presence of mitigating and/or aggravating circumstances (per Article IX rules).
An administrative fine not less than PHP 1,000.00 nor more than PHP 1,000,000.00 shall be imposed, subject to circumstances in the Order and after due notice and hearing.
Rules: (1) No mitigating or aggravating → Medium. (2) Only mitigating → Minimum. (3) Only aggravating → Maximum. (4) Both mitigating and aggravating → apply the offsetting rule first; then impose based on what remains using the applicable rule among (1)-(3).
For every day of continuing violation, the offender must pay an additional PHP 1,000.00 over and above the administrative fine imposed.
Yes. Aside from the administrative fine, other penalties (e.g., closure, confiscation, suspension) may be imposed. However, the respondent may voluntarily pay a fine exceeding the maximum provided under Article 64 of R.A. 7394 (and similarly referenced limits under E.O. 913 and R.A. 7581), in lieu of the imposition of other penalties.
Examples: voluntary admission of guilt; willingness to enter into compromise; willingness to furnish evidence/testify against supplier/manufacturer; willingness to execute undertaking to cease and desist; good faith; compliance with preventive measure of closure as directed; and analogous circumstances.
Examples: second or more offense; multiple violation at one instance; violation by deceit/misrepresentation; falsification of receipts/documents to hide violation; non-issuance/refusal to issue receipts when required; unjustified absence at mediation in bad faith; non-compliance with agreements; refusal to comply with lawful orders; and concealing evidence (among others).
They are circumstances that may be either mitigating or aggravating depending on facts, such as first offense involving small quantity/volume (mitigating if small; otherwise aggravating), nature of goods (basic/prime = aggravating; luxury = mitigating), degree of education, and capitalization (reference to financial statements; if unavailable, compute from total value of violative goods).
Payment must be in a lump sum not later than 30 days from the date the undertaking is submitted. If financially incapable, it may be paid in installments for not more than 12 months, with an undertaking stating due dates.
For such first offense, only the basic fine of PHP 500.00 shall be imposed.