ARTICLE 48 Declaration of Policy
The State shall promote and encourage fair, honest and equitable relations among parties in consumer transactions and protect the consumer against deceptive, unfair and unconscionable sales acts or practices. Grossly inimical to the interests of the consumer or grossly one side in favor of the producer, manufacturer, distributor, supplier or seller. In determining whether an act or practice is unfair and unconscionable, the following circumstances shall be considered:
a) that the producer, manufacturer, distributor, supplier or seller took advantage of the inability of the consumer to reasonably protect his interest because of his inability to understand the language of an agreement, or similar factors;
b) that when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers;
c) that when the consumer transaction was entered into, the consumer was unable to receive a substantial benefit from the subject of the transaction;
d) that when the consumer transaction was entered into, the seller or supplier was aware that there was no reasonable probability or payment of the obligation in full by the consumer; and
e) that the tranction that the seller or supplier induced the consumer to enter into was excessively one-sided in favor of the seller or supplier.
ARTICLE 49. Implementing Agency
The Department of Trade and Industry, hereby referred to as the Department, shall enforce the provisions of this Chapter.
REGULATION OF SALES ACTS AND PRACTICES
ARTICLE 50.Prohibition Against Deceptive Sales Acts or Practices
A deceptive act or practice by a seller or supplier in connection with a consumer transaction violates this Act whether it occurs before, during or after the transaction. An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or seller, through concealment, false representation of fraudulent manipulation, induces a consumer to enter into a sales or lease transaction of any consumer product or service. Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:
a) a consumer product or service has the sponsorship, approval, performance, characteristics, ingredients, accessories, uses, or benefits it does not have;
b) a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is not;
c) a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered, reconditioned, reclaimed or second-hand state;
d) a consumer product or service is available to the consumer for a reason that is different from the fact;
e) a consumer product or service has been supplied in accordance with the previous representation when in fact it is not;
f) a consumer product or service can be supplied in a quantity greater than the supplier intends;
g) a service, or repair of a consumer product is needed when in fact it is not;
h) a specific price advantage of a consumer product exists when in fact it is not;
i) the sales act or practice involves or does not involve a warranty, a disclaimer of warranties, particular warranty terms or other rights, remedies or obligations if the indication is false; and
j) the seller or supplier has a sponsorship, approval, or affiliation he does not have.
ARTICLE 51. Deceptive Sales Acts or Practices By Regulation
The Department shall, after due notice and hearing, promulgate regulations declaring as deceptive any sales act, practice or technique which is a misrepresentation of facts other than those enumerated in Article 50.
ARTICLE 52. Unfair or Unconscionable Sales Act or Practice
An unfair or unconscionable sales act or practice by a seller or supplier in connection with a consumer transaction violates this Chapter whether it occurs before, during or after the consumer transaction. An act or practice shall be deemed unfair or uncionscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer's physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction Grossly inimical to the interests of the consumer or gross one-sided in favor of the producer, manufacturer, distributor, supplier or seller. In determining whether an act or practice is unfair and unconscionable, the following circumstances shall be considered:
a) that the producer, manufacturer, distributor, supplier or seller took advantage of the inability of the consumer to reasonable protect his interest because of his inability to understand the language of an agreement, or similar factors;
b) that when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers;
c) that when the consumer transaction was entered into, the consumer was unable to receive a substantial benefit from the subject of the transaction;
d) that when the consumer transaction was entered into, the seller or supplier was aware that there was no reasonable probability or payment of the obligation in full by the consumer.
e) that the transaction that the seller or supplier induced the consumer to enter into was excessively one-sided in favor of the seller or supplier.
ARTICLE 53. Chain Distribution Plans or Pyramid Sales Schemes
Chain distribution plans or pyramid sales schemes shall not be employed in the sale of consumer products.
ARTICLE 54. Home Solicitation Sales
No business entity shall conduct any home solicitation sale of any consumer product or service without first obtaining a permit from the Department. Such permit may be denied, suspended or revoked upon cause as provided in the rules and regulations promulgated by the Department, after due notice and hearing.
ARTICLE 55. Home Solicitation Sales: When Conducted
Home solicitation sales may be conducted only between the hours of nine o’clock in the morning and seven o’clock in the evening of each working day: Provided, That solicitation sales may be made at a time other than the prescribed hours where the person solicited has previously agreed to the same.
ARTICLE 56. Home Solicitation Sales: by Whom Conducted
Home solicitation sales shall only be conducted by a person who has the proper identification and authority from his principal to make such solicitation.
ARTICLE 57. Receipts for Home Solicitation
Sales generated from home solicitation sales shall be properly receipted as per existing laws, rules and regulations on sale transactions.
ARTICLE 58. Prohibited Representatives
A home solicitation sales shall not represent that:
a) a.the buyer has been specially selected;
b) b.a survey, test or research is being conducted; or
c) c.the seller is making a special offer to a few persons only for a limited period of time.
ARTICLE 59. Referral Sales
Referral selling plans shall not be used in the sale of consumer products unless the seller executed in favor of the buyer a written undertaking that will grant a specified compensation or other benefit to said buyer in return for each and every transaction consummate by said seller with the persons referred by said buyer or for subsequent sale that said buyer has helped the seller enter into.
ARTICLE 60. Penalties
a) Any person who shall violate the provisions of Title III, Chapter I, shall upon conviction, be subject to a fine of not less than Five Hundred Pesos (P500.00) but not more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than five (5) months but not more than one (1) year or both, upon the discretion of the court.
b) In addition to the penalty provided for in paragraph (1), the court may grant an injunction restraining the conduct constituting the contravention of the provisions of Articles 50 and 51
and/or actual damages and such other orders as it thinks fit to redress injury to the person caused by such conduct.
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