CONSUMER PROTECTION ACT (RA No.

7394)

DECLARATION OF POLICY f.​ Exaggerated Supply Quantity

- It is the policy of the State to protect the g.​ Unnecessary Service or Repair
interests of the consumer, promote his h.​ False Price Advantage
general welfare and to establish standards i.​ False Warranties or Terms
of conduct for business and industry. j.​ False Affiliation or Sponsorship
- Towards this end, the State shall
implement measures to achieve the UNFAIR OR UNCONSCIONABLE SALES
following objectives: ACTS OR PRACTICES
1.​ protection against hazards to health - taking advantage of the consumer's
and safety; physical or mental infirmity, ignorance,
2.​ protection against deceptive, unfair illiteracy, lack of time or the general
and unconscionable sales acts and conditions of the environment or
practices; surroundings, induces the consumer to
3.​ provision of information and enter into a sales or lease transaction
education to facilitate sound choice grossly inimical to the interests of the
and the proper exercise of rights by consumer or grossly one-sided in favor of
the consumer; the producer, manufacturer, distributor,
4.​ provision of adequate rights and supplier or seller
means of redress; and a.​ Consumer's Inability to Protect
5.​ involvement of consumer Interests
representatives in the formulation of b.​ Excessive Price
social and economic policies. c.​ No Substantial Benefit for Consumer
d.​ Unlikely Payment Fulfillment*
CONSTRUCTION e.​ Excessively One-Sided Transaction
- The best interest of the consumer shall be
considered in the interpretation and CHAIN DISTRIBUTION PLANS OR
implementation of the provisions of this Act, PYRAMID SALES SCHEMES
including its implementing rules and - a business setup where a person can
regulations. make money by recruiting others into the
program rather than by selling actual
DECEPTIVE SALES ACTS OR products or services.
PRACTICES
- concealment, false representation of HOME SOLICITATION SALES
fraudulent manipulation, induces a - where a person or company sells or leases
consumer to enter into a sales or lease something directly to a consumer, usually
transaction of any consumer product or outside of a regular store.
service. Rule: A business must obtain a permit from
a.​ False Claims about Product the Department before conducting home
Features solicitation sales. The permit can be denied,
b.​ Misrepresentation of Quality or Type suspended, or revoked if there is valid
c.​ False Claims of Product Condition cause, following due notice and hearing.​
d.​ False Availability When: Home solicitation sales can only
e.​ False Compliance with occur between 9:00 AM and 7:00 PM on
Representation working days, unless the person being
 CONSUMER PROTECTION ACT (RA No. 7394)

solicited has previously agreed to a different 2.​ Identify the warrantor and the party
time.​ receiving the warranty.
By Whom: Only individuals with the proper 3.​ Specify the covered products/parts.
identification and authorization from their 4.​ Describe actions to be taken in case
employer can conduct home solicitation of defects, malfunctions, or
sales.​ non-conformance, including who will
Receipts: All sales made through home bear the costs.
solicitation must be properly documented 5.​ Detail the consumer's steps to use
with receipts according to existing laws and the warranty.
regulations.​ 6.​ Set the time frame within which the
Prohibited Representations: warrantor must address issues after
a.​ "Specially Selected" Buyer: being notified of defects.
b.​ "Survey, Test, or Research" b. Express Warranty
c.​ "Special Offer for a Limited Time" 1.​ Sales Report: Distributors must
report sales to the manufacturer
REFERRAL SALES within 30 days, including details
- a type of sales method where the buyer is about the product and buyer. This
encouraged to purchase a product or report acts as warranty registration.
service by being told that they will receive a 2.​ Failure to Report: If the distributor
reward (like a rebate, commission, or fails to report, the manufacturer is
benefit) later if they help the seller get new not liable for the warranty, but the
customers. distributor is responsible for it.
Rule: Shall not be used in the sale of 3.​ Retailer Liability: Retailers are also
consumer products liable for honoring the warranty if
Exception: Allowed if the seller provides a both the manufacturer and
written agreement promising compensation distributor fail to do so.
to the buyer for every transaction made with 4.​ Enforcement of Warranty:
the people referred by the buyer Consumers can claim warranty by
Penalties: FIne of P5,000 to P10,000 or presenting the warranty card or
imprisonment of not more than 1 year, ot receipt to the seller (distributor,
both upon the discretion of the court.​ retailer, or manufacturer).
5.​ Purchase Records: Distributors and
PRODUCT SERVICE AND WARRANTY retailers must keep purchase
Implementing Agency: Department of records for the warranty’s duration.
Trade and Industry 6.​ Invalid Agreements: Any
Applicable Law on Warranties: The agreements contradicting these
provisions of the CIvil COde on conditions provisions are legally void.
and warranties c. Designation of Warranties
​ 1.​ Full Warranty
ADDITIONAL PROVISIONS ON 2.​ Limited Warranty
WARRANTIES d. MInimum Standards for Warranties
a. Terms of Express Warranty 1.​ Warrantors must repair or replace a
1.​ Clearly state the terms in defective product within a
understandable language. reasonable time and at no cost.
 CONSUMER PROTECTION ACT (RA No. 7394)

2.​ Consumers can choose a refund or - Service firms must guarantee their
replacement if the product remains workmanship and replace spare parts for at
defective after reasonable repair least 90 days, as indicated on the invoices.
attempts.
3.​ Warrantors are not liable for defects PROHIBITED ACTS
caused by unreasonable use. a. Refusal to Honor Warranty
e. Duration of Warranty b. Unreasonable Delay
1.​ The express warranty duration can c. Removing Warranty Card
be agreed upon by both parties. d. False Representation
2.​ Implied warranties last at least 60 Penalties: Fine of P500 - P5,000 or
days but not more than 1 year for imprisonment of 2 to 3 years, or both. Fine
new consumer products. of P1,000 - P50,000 or imprisonment of 1 to
3.​ Implied and express warranties must 5 years, or both.
have equal durations if both apply.
f. Breach of Warranty LABELING AND FAIR PACKAGING
1.​ Express Warranty Breach: PROHIBITED ACTS
Consumers can request repair or a - It is illegal to sell or distribute consumer
refund. Repairs must be made within products with packaging or labels that do
30 days. If a refund is requested, the not comply with regulations. This does not
usage amount before the defect is apply to wholesale or retail distributors
deducted. unless they are involved in labeling,
2.​ Implied Warranty Breach: packaging, or specifying how products
Consumers can keep the product should be labeled. It also applies if they
and seek damages or reject it, know about mislabeled or mispackaged
cancel the contract, and get back the products and refuse to disclose the source.
purchase price plus damages.
MINIMUM LABELING REQUIREMENTS
WARRANTY IN SUPPLY OF SERVICES​ a. Correct trade name, trademark, and
a. Services must be provided with care and business name.
skill, and any materials used must be fit for b. Manufacturer’s, importer’s, or repacker’s
their purpose. address in the Philippines.
b. If the consumer specifies a purpose, c. General make or active ingredients.
services and materials must be suitable for d. Net content in metric weight, measure, or
that purpose, unless it's unreasonable to count.
rely on the seller’s skill. e. Country of manufacture (if imported).
f. Statement if the product is made, refilled,
PROFESSIONAL SERVICES or repacked under license.
- The warranty provisions do not apply to - Additional details may be required, such
professional services provided by certified as flammability, directions for use, toxicity
public accountants, architects, engineers, warnings, wattage, or manufacturing
lawyers, medical professionals, and other process.
similar professionals.
PHILIPPINE PRODUCT STANDARD
GUARANTY OF SERVICE FIRMS MARK
 CONSUMER PROTECTION ACT (RA No. 7394)

The label may contain the Philippine b.​ Available scientific, medical, and
Product Standard Mark if it is certified to engineering data on accidental
have passed the consumer product ingestion, illnesses, and injuries.
standard prescribed by the concerned c.​ Manufacturing practices of affected
department. industries.
d.​ The nature and use of consumer
AUTHORITY OF CONCERNED products.
DEPARTMENTS
- The concerned department can establish ADDITIONAL LABELING
additional labeling and packaging REQUIREMENTS
regulations if necessary to prevent For Food:
consumer deception or facilitate product a.​ Expiry or expiration date (if
comparisons. These may include: applicable).
a.​ Package Size Standards: Defining b.​ Type of product (semi-processed,
package size standards to fully processed, ready-to-cook,
supplement net content labels, but ready-to-eat, prepared, or a
not restricting the package's size, mixture).
shape, or weight. c.​ Nutritive value (if any).
b.​ Price Claims Regulation: Regulating d.​ Whether ingredients are natural or
claims on packaging or labels about synthetic.
retail price reductions or advantages e.​ Any additional labeling requirements
due to package size or contents. deemed necessary by the
c.​ Nonfunctional Slack-Fill Prevention: concerned department.
Preventing packaging from being For Cosmetics:
excessively empty unless it serves a a.​ Expiry or expiration date.
functional purpose, such as b.​ Whether the product may be an
protecting contents or due to irritant.
packaging requirements. c.​ Precautions or contraindications.
d.​ Any additional labeling requirements
SPECIAL PACKAGING FOR THE deemed necessary by the
PROTECTION OF CHILDREN concerned department.
- The concerned department may set For Drugs:
standards for special packaging of - The Generics Act shall apply
consumer products if: For Cigarettes:
a.​ The product poses a significant risk - Cigarette packages must carry the
to children due to its packaging, warning: "Warning: Cigarette Smoking is
requiring protection from serious Dangerous to Your Health" in a conspicuous
injury or illness. and legible place, with contrasting
b.​ The special packaging is technically typography, layout, or color.
feasible and appropriate for the - Cigarette advertisements must include this
product. warning as well.
- In setting these standards, the department
will consider:
a.​ The reasonableness of the standard.
 CONSUMER PROTECTION ACT (RA No. 7394)

MISLABELED FOOD e.​ The label does not list the common
a.​ Its labeling or advertising is false or or usual name of its ingredients.
misleading.
b.​ It is sold under the name of another MISLABELED DRUGS AND DEVICES
food. a.​ Its labeling is false or misleading.
c.​ It imitates another food without b.​ It doesn't meet packaging and
labeling it as "imitation" followed by labeling requirements (with
the original food's name. exceptions for small packages).
d.​ Its packaging is misleading. c.​ Required information isn't
e.​ It doesn't meet labeling prominently displayed for easy
requirements, though small package reading and understanding.
exceptions may apply. d.​ It contains habit-forming substances
f.​ Required information isn't (e.g., narcotics, opioids) without
prominently displayed for easy proper warning and quantity on the
understanding. label.
g.​ It doesn't conform to defined e.​ It lacks adequate directions for use
standards or lacks proper ingredient or warnings about dangerous
labeling. conditions, dosages, or application
h.​ If the quality falls below the methods.
prescribed standard, it must indicate f.​ It claims to be a drug from an official
that on the label. compendium but is not packaged
i.​ If it is not subject to standard according to the compendium.
definitions, it must list the common g.​ It is prone to deterioration and
name and ingredients (excluding doesn't include the necessary
spices, flavorings, and colorings). precautions on packaging.
j.​ If marketed for special dietary uses, h.​ The container design is misleading
it must list relevant dietary or the drug imitates another.
information. i.​ It is harmful when used according to
k.​ If it contains artificial flavoring, the prescribed dosage or duration.
coloring, or preservatives, it must be j.​ It contains antibiotics or insulin
labeled accordingly (with exemptions without the necessary certification
for certain products like butter, and release from the concerned
cheese, and ice cream). department.

MISLABELED COSMETICS REGULATION-MAKING EXCEPTIONS

a.​ Its labeling or advertising is false or - The concerned department can exempt
misleading. certain food, cosmetics, drugs, or devices
b.​ It doesn't conform to labeling from labeling requirements if they are
requirements, though small package processed, labeled, or repacked in large
exceptions may apply. quantities at different establishments, as
c.​ Required information is not long as these products are not adulterated
prominently displayed in a clear and or mislabeled, and the exemption is
understandable way. approved by the relevant establishments.
d.​ The container design is misleading.
 CONSUMER PROTECTION ACT (RA No. 7394)

MISLABELED HAZARDOUS after paying costs and a bond to ensure

SUBSTANCES compliance.
a.​ They are intended for household c. Expenses: The owner or consignee is
use, especially by children, but lack responsible for all destruction, storage, and
proper labeling. labor costs related to the hazardous
b.​ The label fails to include necessary substance, with unpaid expenses creating a
details such as the manufacturer’s lien on future imports.
name, common or chemical names
of harmful components, signal words PRICE TAG REQUIREMENT
like "danger" or "caution," - It is illegal to sell consumer products
instructions on potential injuries, without a clear price tag or label indicating
precautionary measures, first-aid the price, and products must be sold at the
instructions, and storage guidelines. stated price without discrimination.
c.​ The label must be prominently Lumber: Lumber for sale must be labeled
displayed in clear, readable with its price and official wood name.
typography with the correct color Small Products: For small products, a
contrasts to ensure visibility and visible price list near the display can replace
safety. individual price tags.
Exceptions Price Tag Placement: Price tags, labels, or
- The concerned department may exempt markings must clearly display the price in
certain hazardous substances from full pesos and centavos.
labeling requirements if it deems such Regulations: The concerned department
exemptions are justified to protect public will set rules for visible price placement and
health and safety. These exemptions will be prohibit any alterations to price tags or
subject to regulations ensuring adequate labels.
safety. Any substance that does not meet Penalties: Fine of P200 to P5,000 and
the labeling standards will be considered imprisonment of 1 to 6 months, or both
mislabeled.
PHILIPPINE LEMON LAW RA 10642
GROUNDS FOR SEIZURE - An act strengthening consumer protection
a. Seizure & Condemnation: Mislabeled in the purchase of brand new motor vehicles
hazardous substances can be seized and - The State ensures full protection of
condemned by the concerned department if consumer rights in motor vehicle sales,
introduced into commerce or held for sale, preventing deceptive and unfair business
with specific procedures followed. practices. Since vehicles are major
Exemptions apply for substances intended investments, consumers’ rights and redress
for export, provided they meet labeling mechanisms must be clearly defined.
requirements for the foreign market.
b. Disposal: Condemned substances can be REQUISITES TO INVOKE
destroyed or sold, with proceeds going to 1.​ Be brand new.
the Philippines treasury. If sold, the sale 2.​ Be purchased in the Philippines.
must comply with this Act. The owner may 3.​ Have defects that do not conform to
retrieve the substance under supervision manufacturer/distributor standards,
impairing its use, value, or safety.
 CONSUMER PROTECTION ACT (RA No. 7394)

4.​ Have a defect that cannot be - The manufacturer or dealer must try to fix
repaired. the issue to meet the vehicle’s original
Exclusions: standards.
a.​ Consumer’s failure to comply with - If the problem remains unresolved, the
the warranty. consumer may file a complaint with the
b.​ Unauthorized modifications. Department of Trade and Industry (DTI).
c.​ Abuse, neglect, or accidental Deemed Successful Repair
damage. - If the vehicle is not returned for repair
d.​ Damage due to force majeure. within 30 days after release following the
Timeframe for Claim: final repair attempt, the repair is considered
- Within 12 months from the original delivery successful.
date or up to 20,000 kilometers of operation, - If the issue persists after 30 days but still
whichever comes first. within the Lemon Law period, the consumer
may still invoke their rights under the law.
REPAIR ATTEMPTS​ Compensation for Non-Use
- Within the Lemon Law period, if a vehicle - While the vehicle is under repair, the
undergoes at least **four (4) repair consumer is entitled to compensation for
attempts** by the same manufacturer, transportation, which may be: air
distributor, authorized dealer, or retailer for conditioned taxi fare (with official receipts),
the same issue and remains defective, the mutually agreed amount, and service
consumer may invoke their Lemon Law vehicle provided by the manufacturer or
rights. Repairs may involve replacing parts, dealer.
components, or assemblies. Consumer Rights Protection
- This law does not limit or restrict any other
NOTICE OF AVAILMENT legal rights or remedies available to the
- Before claiming any remedies, the consumer.
consumer must provide a written notice to
the manufacturer, distributor, dealer, or REMEDIES FOR DISPUTE RESOLUTION
retailer. The notice must include: the The Department of Trade and Industry (DTI)
unresolved issue and the consumer’s intent has exclusive authority over disputes under
to invoke their Lemon Law rights. This must the Lemon Law. The resolution process
be done within the Lemon Law period. includes three stages:
1. Mediation
WARRANTY BOOKLET - Aims for an amicable settlement between
- The warranty booklet must clearly state: the consumer and manufacturer/dealer.
the proper way to submit a valid and legal - DTI independently verifies the validity of
notice to the manufacturer or dealer and the the complaint using government agencies or
consumer’s responsibilities under this law. private experts.
- Mediation must be resolved within 10
AVAILMENT OF LEMON LAW RIGHTS​ working days.
- After filing a notice of availment, the - If mediation fails, a certificate of failure is
consumer must bring the vehicle to the issued.
manufacturer, distributor, dealer, or retailer 2. Arbitration (Voluntary)
for a final repair attempt.
 CONSUMER PROTECTION ACT (RA No. 7394)

- If mediation fails, both parties may agree - The deduction is whichever is lower
to arbitration for a resolution. between:
3. Adjudication (Mandatory if arbitration is 1.​ 20% per year from the purchase
not chosen) price, or
- If arbitration is not pursued, either party 2.​ (Distance traveled in km × Purchase
may request adjudication by the DTI. price) ÷ 100,000 km
- Adjudication must be completed within 20
working days. DISCLOSURE ON RESALE
- If the DTI finds nonconformity, the - If a returned vehicle is resold, the seller
manufacturer/dealer must: must provide a written disclosure to the next
a.​ Replace the vehicle with a buyer, stating:
comparable one. 1.​ The vehicle was returned to the
b.​ Refund the purchase price plus manufacturer or dealer.
collateral charges (e.g., registration 2.​ The reason for return (nature of the
fees, insurance, mortgage interest). defect).
- if the consumer chooses a 3.​ The vehicle's condition at the time of
higher-value replacement, they must resale.
pay the price difference. - The seller’s responsibility end after selling
- reasonable allowance for use** will the vehicle to the first new buyer.
be deducted from refunds or
replacements. PENALTIES
- If no defect is found, the consumer must - Failure to disclose this information results
reimburse the manufacturer/dealer for the in a minimum fine of P100,000.
validation costs. - Additional civil or criminal liability may
apply under existing laws.
APPEALS PROCESS
- A final decision by the Adjudication Officer
can be appealed within 15 days on these
grounds:
1.​ Grave abuse of discretion
2.​ Decision exceeds jurisdiction
3.​ Decision lacks evidence or has
serious factual errors
- The DTI Secretary must decide on the
appeal within 30 days.
- Further appeals can be filed with the Court
of Appeals via a petition for certiorari under
Rule 65 of the Revised Rules of Court.

DETERMINATION OF REASONABLE
ALLOWANCE FOR USE​
- When a vehicle is returned, a deduction is
applied before a refund or replacement.