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Republic of the Philippines
Congress of the Philippines
Metro Manila
Twelfth Congress
Third Regular
Session
Begun
and held in Metro Manila, on Monday, the twenty-eight day of July,
two thousand three.
REPUBLIC ACT NO. 7394
TITLE I
GENERAL PROVISIONS
Article 1. Short Title. - This Act shall be known as the "Consumer
Act of the Philippines."
Art. 2. Declaration of Basic Policy. - It is the policy of the State
to protect the interests of the consumer, promote his general
welfare and to establish standards of conduct for business and
industry. Towards this end, the State shall implement measures to
achieve the following objectives:
(a) protection against hazards to health and safety;
(b) protection against deceptive, unfair and unconscionable sales
acts and practices;
(c) provision of information and education to facilitate sound
choice and the proper exercise of rights by the consumer;
(d) provision of adequate rights and means of redress; and
(e) involvement of consumer representatives in the formulation of
social and economic policies.
Art. 3. Construction. - The best interest of the consumer shall be
considered in the interpretation and implementation of the
provisions of this Act, including its implementing rules and
regulations.
Art. 4. Definition of Terms. - For purposes of this Act, the term:
(a) "Advertisement" means the prepared and through any form of mass
medium, subsequently applied, disseminated or circulated advertising
matter.
(b) "Advertising" means the business of conceptualizing, presenting
or making available to the public, through any form of mass media,
fact, data or information about the attributes, features, quality or
availability of consumer products, services or credit.
(c) "Advertising agency or Agent" means a service organization or
enterprise creating, conducting, producing, implementing or giving
counsel on promotional campaigns or programs through any medium for
and in behalf of any advertiser.
(d) "Advertiser" means the client of the advertising agency or the
sponsor of the advertisement on whose account the advertising is
prepared, conceptualized, presented or disseminated.
(e) "Agricultural purpose" means a purpose related to the
production, harvest, processing, manufacture, distribution, storage,
transportation, marketing, exhibition or disposition of
agricultural, fishery or marine products.
(f) "Amount financed" in a consumer credit sale constitutes the cash
price plus non-finance charges less the amount of any downpayment
whether made in cash or in property traded in, or in a consumer loan
the amount paid to, receivable by or paid or payable to the buyer or
to another person in his behalf.
(g) "Banned hazardous substance" means (1) any toy or other articles
intended for use by children, which are hazardous per se, or which
bear or contain substances harmful to human beings; or (2) any
hazardous substance intended or packaged in a form suitable for use
in the household, which the implementing agency by regulation,
classifies as "banned hazardous substance" notwithstanding the
existence of cautionary labels, to safeguard public health and
safety: Provided, That the implementing agency may, by regulation,
exempt from this Act, articles which by reason of their functional
purpose require the inclusion of the hazardous substance involved
and which bear appropriate labels giving adequate directions and
warnings for their safe use.
Procedures for the issuance, amendment or repeal of regulations
pursuant to clause (2) or paragraph (g) of this Article shall be
governed by the rules and regulations promulgated by the Department
of Health; Provided, That if the Department of Health finds that the
distribution for household use of the hazardous substance involved
presents an imminent hazards to the public health, it may publish in
a newspaper of general circulation a notice of such finding and such
substance shall be deemed to be a "banned hazardous substance"
pending the issuance of regulation formally banning such substance.
(h) "Batch" means a quantity of any drug or device produced during a
given cycle of manufacture.
(i) "Business name, firm name, or style" means any name or
designation other than the true name of a person, partnership,
corporation or association which is used or signed in connection
with his/its business or in -
(1) any written or printed receipt, including receipt for tax or
business;
(2) any written or printed contract not verified by a notary public;
(3) any written or printed evidence of any agreement or business
transaction; and
(4) any sign or billboard kept conspicuously exhibited in plain view
in or at the place of the business, announcing a firm name or
business name or style.
(j) "Cash price or delivered price", in case of trade transaction,
means the amount of money which would constitute full payment upon
delivery of the property (except money) or service purchased at the
creditor's place of business. In the case of financial transactions,
cash price represents the amount received by the debtor upon
consummation of the credit transaction, net of finance charges
collected at the time the credit is extended, if any.
(k) "Chain distribution plans" or "pyramid sales schemes" means
sales devices whereby a person, upon condition that he makes an
investment, is granted by the manufacturer of his representative a
right to recruit for profit one or more additional persons who will
also be granted such right to recruit upon condition of making
similar investments: Provided, That the profits of the person
employing such a plan are derived primarily from the recruitment of
other persons into the plan rather than from the sale of consumer
products, services and credit: Provided, further, That the
limitation on the number of participants does not change the nature
of the plan.
(l) "Closing out sale" means a consumer sale wherein the seller uses
the announcement to create the impression that he is willing to give
large discounts or merchandise in order to reduce, dispose or close
out his inventory and business.
(m) "Commerce" means the sale, lease, exchange, traffic or
distribution of goods, commodities, productions, services or
property, tangible or intangible.
(n) "Consumer" means a natural person who is a purchaser, lessee,
recipient or prospective purchaser, lessor or recipient of consumer
products, services or credit.
(o) "Consumer credit" means any credit extended by a creditor to a
consumer for the sale or lease of any consumer product or service
under which part or all of the price or payment therefor is payable
at some future time, whether in full or in installments.
(p) "Consumer loan" means a loan made by the lender to a person
which is payable in installments for which a finance charge is or
may be imposed. This term includes credit transactions pursuant to
an open-end-credit plan other than a seller credit card.
(q) "Consumer products and services" means goods, services and
credits, debts or obligations which are primarily for personal,
family, household or agricultural purposes, which shall include but
not limited to food, drugs, cosmetics, and devices.
(r) "Consumer product safety rule" means a consumer product safety
standard described in Article 78 or a rule under this Chapter
declaring a consumer product banned hazardous product.
(s) "Consumer transaction" means (1) (i) a sale, lease, assignment,
award by chance, or other disposition of consumer products,
including chattels that are intended to be affixed to land, or of
services, or of any right, title, or interest therein, except
securities as defined in the Securities Act and contracts of
insurance under the Insurance Code, or (ii) a grant of provision of
credit to a consumer for purposes that are primarily personal,
family, household or agricultural, or (2) a solicitation or
promotion by a supplier with respect to a transaction referred to in
clause (1).
(t) "Corrosive" means any substance which on contact with living
tissue will cause destruction of tissue by chemical action.
(u) "Cosmetics" means (1) articles intended to be rubbed, poured,
sprinkled or sprayed on, introduced into or otherwise applied to the
human body or any part thereof for cleansing, beautifying, promoting
attractiveness, or altering the appearance, and (2) article intended
for use as a component of any such article except that such term
shall not include soap.
(v) "Counterfeit product" means any consumer product which, or the
container or labeling of which, without authorization, bears the
trademark, trade name, or other identifying mark, imprint, or
device, or any likeness thereof, of a consumer product manufacturer,
processor, packer, distributor, other than the person or persons who
in fact manufactured, processed, packed or distributed such product
and which thereby falsely purports or is represented to be the
product of, or to have been packed or distributed by such consumer
product manufacturer, processor, packer, or distributor.
(w) "Credit card" means any card, plate, coupon book or other credit
device existing for the purpose of obtaining money, property, labor
or services on credit.
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