Title
Supreme Court
Consumer Protection Law Philippines
Law
Republic Act No. 7394
Decision Date
Apr 13, 1992
The Consumer Act of the Philippines is a comprehensive law that aims to protect consumers and promote fair consumer credit practices, covering various aspects of consumer transactions and establishing guidelines for accreditation, certification, disclosure, and dispute resolution.

Law Summary

Key Definitions

  • Extensive definitions provided for terms such as "advertisement," "agricultural purpose," "banned hazardous substance," "consumer," "credit sale," "hazardous substance," "manufacturer," "service," "supplier," among others.
  • Definitions cover a wide range of commercial activities and product categories including food, drugs, cosmetics, devices, credit transactions, and hazardous substances.

Consumer Product Quality and Safety

  • State duty to develop and enforce quality and safety standards for consumer products.
  • Implementation by relevant government departments (Health, Agriculture, Trade and Industry).
  • Standards include requirements about product attributes, packaging, labeling, safety warnings, and testing.
  • Procedures for rule promulgation, publication, amendment, and enforcement are mandated.
  • Mechanisms for recall, seizure, and prohibition of unsafe or dangerous products.
  • Imported products must comply with standards and undergo inspection; non-compliant products refused entry.
  • Liability for stockpiling to prevent evasion of safety rules.

Prohibited Acts and Penalties on Product Quality

  • Manufacturing or distributing non-compliant, banned or hazardous products is prohibited.
  • Failure to allow inspection or comply with recall orders is punishable.
  • Penalties include fines, imprisonment, revocation of licenses, and deportation for foreign offenders.

Regulation of Food, Drugs, Cosmetics, and Devices

  • Department of Health sets standards and quality controls.
  • Adulteration and mislabeling are specifically defined and prohibited.
  • Licensing and registration of manufacturers, distributors, and importers is required.
  • Certification for antibiotic-containing drugs and batch release.
  • Provisions cover new drugs, banned or restricted drugs, and dangerous drugs under specialized boards.
  • Administrative sanctions, fines, and enforcement measures are detailed.

Hazardous Substances

  • Protection against hazardous substances other than food, drugs, cosmetics and devices.
  • Department of Health to enforce regulations, including labeling and packaging.
  • Hazardous substances refused entry if banned or mislabeled.
  • Prohibited acts include introduction, distribution, alteration, or false guarantees related to hazardous substances.
  • Penalties for violations include fines and imprisonment.

Prohibition of Deceptive, Unfair, and Unconscionable Sales Acts

  • Deceptive acts include false claims about product attributes, quality, price, or warranty.
  • Unfair acts exploit consumer vulnerabilities or involve grossly one-sided transactions.
  • Chain distribution (pyramid) schemes and referral sales without proper undertakings are prohibited.
  • Home solicitation sales require permits and adherence to prescribed conduct and hours.
  • Penalties include fines and imprisonment.

Regulation of Weights and Measures

  • Official sealing, calibration, and enforcement by local treasurers and Department of Trade and Industry.
  • Use of metric system mandated.
  • Prohibits fraudulent practices such as using counterfeit seals or falsifying weights.
  • Penalties for violations include fines and imprisonment.

Consumer Product and Service Warranties

  • Written warranties must be clear, specify terms, and be operative from sale.
  • Manufacturers, distributors, and retailers bear liabilities in a tiered manner.
  • Consumers entitled to repair, replacement, refund, or damages in case of warranty breach.
  • Implied warranties apply to services with care and skill standards.
  • Professionals exempted from warranty provisions.
  • Service firms must guarantee workmanship and parts for at least 90 days.
  • Penalizes refusal or delay in honoring warranties or false warranty representations.

Labeling and Fair Packaging

  • Mandatory accurate labeling covering brand, manufacturer, content, instructions, and warnings.
  • Departments may require additional or special labeling to prevent deception.
  • Prohibits mislabeled products and deceptive packaging.
  • Special packaging standards for child protection.
  • Price tagging rules enforce price transparency.
  • Specific requirements for food, drugs (including generics), cosmetics, and hazardous substances labeling.
  • Cigarette packaging must bear health warnings.
  • Penalties for violations range from fines to imprisonment.

Liability for Product and Service Defects

  • Manufacturers, importers, producers liable for damages due to defective products independent of fault.
  • Defects include design, manufacture, inadequate information, and presentation.
  • Tradesmen/sellers liable when manufacturers cannot be identified or goods improperly preserved.
  • Suppliers jointly liable for imperfections in quality, quantity, and service.
  • Consumers may demand remedy, replacement, refund, or price reduction.
  • Legal guarantee of adequacy mandatory; contract clauses limiting liability are prohibited.
  • Penalties for violations include fines and imprisonment.

Advertising and Sales Promotion

  • False, deceptive, or misleading advertisements prohibited.
  • Comparative price advertising subject to strict conditions.
  • Food, drug, cosmetic, device, hazardous substance ads must conform to approved labeling and regulations.
  • Credit and open-end credit advertisements require disclosure of terms.
  • Sales promotion campaigns require permits and regulation of conduct.
  • Notification and procedural requirements for sales promotions including winner selection and publication.
  • Injunctive relief available against fraudulent advertising.
  • Penalties for violations include fines, imprisonment, and deportation for responsible persons.

Regulation of Repair and Service Firms

  • Accreditation of repair and service firms and their technical personnel mandatory.
  • Minimum requirements include business registration, certificate of accreditation, technical skills, and necessary licenses.
  • Operating without accreditation prohibited.
  • Certificates may be suspended or revoked for cause.

Consumer Credit Transactions

  • Laws simplified and modernized to encourage fair consumer credit practices.
  • Finance charges defined comprehensively including interest, fees, and insurance premiums.
  • Disclosure requirements detailed for all credit transactions including open-end plans.
  • Consumers entitled to prepay without penalty and get appropriate rebates.
  • Required disclosures must be clear, conspicuous, and made before consummation.
  • Exemptions apply for business or government credit transactions.
  • Penalties apply for failure to disclose, including monetary fines.

National Consumer Affairs Council

  • Established to coordinate consumer protection programs among government and private sectors.
  • Composed of representatives from key government departments, consumer organizations, and business sectors.
  • Powers include policy recommendations, program monitoring, education campaigns, and consumer representation.
  • Consumer education integrated into school curricula.
  • Provides advisory services and facilitates consumer participation in policymaking.
  • Filing and handling of consumer complaints through arbitration officers empowered to mediate and adjudicate with binding orders.
  • Administrative sanctions and appeals procedures specified.

Transitory and Final Provisions

  • Act applies notwithstanding contrary agreements, without restricting other rights.
  • Actions under the Act prescribe within two years from consummation or discovery of defect.
  • Repeals inconsistent laws, provides appropriations for implementation.
  • Separability clause ensures remaining provisions remain effective if any part is invalidated.
  • Effective 30 days after publication.

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