NGA ALITUNTUNIN KAGAWARAN, KAWANIHAN AT ‘TANGGAPAN AT MGA KAUTUSANG PAMPANGASIWAAN, _OEPARTUENT, BUREAU AND OFFICE AOUNETRATIE ORDERS ‘AND REGULATIONS) ‘DEPARTMENT ADMINISTRATIVE ORDER NO. 2 ‘Series of 1999 Subject: RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 7394, OTHERWISE KNOWN {AS THE CONSUMER ACT OF THE PHILIPPINES repuados ere berely promugued ‘Tile I— GENERAL PROVISIONS Role I Title Section 1 Tule — These Rules shall b referred to a the Rale Il. Scope and Coverage Section 1. Scope and Coverage —Bxcept.as may otherwise be provided, the following Roles shall spply to all consumer products and ervices,excopé feed, drugs, davies, cosmetics and urdsement —means the prepared and Uarough any ‘mass medium, subsequently applied, disseminated or rodct serie rereit aswellofthe sles prometin campaign and shall be sujet to he 0, Business Nome, Firm Name, or Style — means any designation other than the true name of @ person, partnership, corporation or association which is usd or signed afte basines ri iptfertaxonbusiness; ‘wetten o printed contract not verified by 8 therer 1.19, Consumer — means a natural person who ie a pur- ‘or is represonted to be product orto have been packed or of tho sales agreement. act can no longer be uaed fr the purpose for 1134. Bxpres War any promise ty the sller relating to the thing if Ube nataral tendoneyof such affirmation or promis isto induce the buyer topporchase the same and if the buyer purchases the same relying ‘Flammable ~meansany substance or material that is ‘A short eae promo asin 1 hour er 30 minates would not ‘qualify ae instant soles promotion, sf dhe sponser hed been ‘sdvertising the same a day or even few minutes before Die purchase or ptronage is made; “Lad, Inter or time priced diferential — means the dif ference in the sath price andthe eet price ofthe product or ‘components, gradients tributes, dretions for us, speci ‘ations and vod other information ae maybe required by lw or is required, provided thatthe possesion and ownership ofthe product remains with the seller uot ful payment atthe time ‘greed upon. "LAT. Limited warranty — means a wrtton warranty which does not meet the minimum requirements set forth in these1.51, Market — ‘means the consuming publi, or a eass, 1.58.2. The person has the privilege of paying the balanoe oe 1158. Finance change may be computod by the creditor ‘roduck or service cr benefit frie, aba redased price erathe a i, which ight woud not have Ben ave priae should he win inthe promotion. omoted. Jaale ~ means the sol or lease fa consumer nowleged in the label orn the sale thereat 1L22- Regonal office —reforstoany of the regional fice of through a dercripton ofthe prodactorservin ether verbally oF ‘hroogh any form a erature.1.80. Sale by sample — means the sale or lees of consumer 1182, Sampling — means a sales promotion campaign wwnraby the spensotpromater gives away for free products er TEAS. Serap consumer product or deteriorated consumer product — means a consumer product whih can no longer be "sed far the purpoe fr which it was made, manufactured or Industry 1.7. Suding—eanath proces of piting winning ato the regular circulation in the market. = ‘Substandard Product ~meanss prodsct which allt ‘ampiy with an applieable consumer product safety rule which ‘creates a substantial isk of ijary to the pubic. 1.95. Supplier — moans person, ofher than « consumer, wo, in the eure ohis busines, soit, offers advertres otconsumer product or service or owner or operator of camer service firm in a consumer sae transaction. Pro Implied Warranty — means rights and cbliga- proceeding from the ‘ive mI PROTECTION AGAINST DECEPTIVE, UNFAIR AND “UNCONSCIONABLE SALES ACTS AND PRACTICES Chapter! DECEPTIVE, UNFAIR AND UNCONSCIONABLE SALES ACTS AND PRACTICES. ‘Rule L Coverage — Theos rule shall apply to acts and faseof any consumer product andi the serie.ule Il Prohibition Against Deceptive ‘Sales Act and Practices “Among Themsel dures; ‘2:14. Approval or Sponsorship of Person or Group of Persons Whether Individually or Informally Assotated jes — a signed and unrevoked document 22, A connumer product or service has the performance, characteristic ingredients scceasores, uses orbencits tds accordance wih the previoss representation when infact tisnot,r. 2.7. A consumer product or sarvee can be supplied in a ‘quantity geatar than the supplier intends. ‘Asorvice or repalrafa consumer productieneeded when | ‘na sales transaction, in any document evidencing such sale or "anywhere in a store or business establishment. Section 8 Chain Distribution Plans or Pyramid Schemes — ‘Chain distribution plans or pyramid sales homes shall not be ‘Smplayed inthe ele af consumer produce [Role IL, Unfair and Unconscionable Sales Acts or Practices her Rossrsbabre taingoraher De conemer tana Section 2. Circumatances to be Considered in Determining Into, the price grossly exceeded the price at which similar productsorservces wereveailyebiainablein simlartransecion by ke consumers; ‘2 That when the consumer transaction was entered "2.5, That the trantaction thatthe seller or supplier in doce the consumer tote nto was exensvely onesidd in favor of the seller or sappir.ule IV. Rules on Certain Sales Acts and Practices Section 1. Sal by Sample —Tho sample used inthe sling sstcnopneeareenmnerneanrangnenane wonton 411. Whereaprior writen greementforthepurposehad ‘been tered the seller or esor and the buyer o esse, ment is part of prior subserp- tion agreement betmeen the seller or lessor and thebuyer cr “213, Inthe cas of els or organizations where such Section 5, Referal Sales — Refer selling plans shal not ‘be used inthe sale of consumer products unless the sller {tanta specified compencation or oer benefit to sad buyer each ad every transaction consummated hy the sid "wih the yersons referred by sald buyer or fr subsequent Section 6 Sale by Vending Machines — Where consumer products are ald throagh vending machines or like machines the name and businessRole V. Home Solicitation Sales Section 2. When to Apply for a Permit — The permit to ‘onduthomessicitationsalesshallbeappied for upon electivity fof these Rules or upen opening of home solietaten sales business and every two years thereafter the Department's regional office which has jurisdiction over such provinces; ‘3.2. I the home salitation sae isto be conducted within ‘eiatatin of “45, The ope and daraton af authority granted to such agents; “46. Aspecimen ofthe authorization given tosuch agents and ‘47. Acspocimen of he deniation given to such agents Section 5, Updating of formation on Registered Agents for afore 852. Any new agent hasbeen authorized by Dv ap candt home sltatin sles in its behalf 3 Department, after due notice andhearing, on any ing grounds,Section 8, Home Solicitation Sales: By Whom Conducted — es may be conducted by » person who has ation and authonty fam his principal to E ‘Rule VI Rules on Consumer Service Firms Section 1 Representation a to Availablity of Certain Fa "scorrespondingrefundef payments ready Secon 2 play of ene Operate Consumer eee or regulation THN nics covering touch branch ‘Section 3, Damage or Injury Caused by Service Firm — Any repair fr damage or njory caused by the service firm shall be ‘aid fr by th srice firm whether o not the repair is under- athe corvices of ‘without prjade to ales or under other existing law and reglations| ‘on reasonable rust, [Rule VI. Additional Rules on Consumer Repair and ‘Service Firms for Electrical Appliances, Electronic "Bauipment, Machines and Other Mechanical "Equipment and Motor Vehicles Scion 1 Baie undertaking any repo mviing of wee shall be informed by product, ‘When the consumer product has been dismantd to assess theertentofthe damage andthe consumer deeides to forego the stance ofa penalty 17. The tomized and total amount tobe psi ‘servicing ofthe predact, separatinglabor charges pare part or materials ave tobe procure ervicecan be dono and euch material are identified and arefor the account ofthe consumer. Section. ‘The repair or tervicingaf'acansumer product sh {cluding the pice of uch additonal work, Section 4 No replacement or chango in any ofthe paris of cmmumer procuct under repair shall be made without the Jenowledg and prior onsent ofthe owner. possible be pre [sreplacemenis obtainable only in the reparand sorvce firm, ‘he name, brand and price ofthe same shal be mae knows to ‘he consumer pri tothe actual rep[Rule I. Laws Governing Warranties on Consumer Products and Services Section 1. Applicable Lawson Warranty —1 provisions ofthe Civil Code on conditions and warranties, the flowing Rules shall govern al contracts fsale with warranties. [Rule IL. Terms of Express Warranties Section 1, lear and Understandable Language — Express warranties on consumer products and services shal be wettan In lea and readily understandable language. Section 2. Contents of Bxpress Warranties — Express war ‘antes shall, among others, contain tho fllowing information: 2:1. The basiness name and addres of the warranto, 22, The name and address of the person to whom the days nor more than ene (1) Yea encumer products product within a reasonable ofa defect, malfunction ot ‘unreasonable ine ofthe consumer product‘Rule IV. Recording and Reporting of Sales of Products 4. Record of Purchaser —Distebutors and retailers rehaseneovered Role V. Enforcement of Warranty Rights ‘Section 1.The Warranty rights can be enforeed hy present- sent of a lai, Tothisend; the purchaser needs only topresent ther the warranty eardo the oficial purchaser. immediate seller i Uhe manvfactare’s ‘dhe warranty shallimmediatalybebonored. te dstribator beeonsiroed as a waiver of his Mellons northe extnstion ote libiiy ofthe manvfactarer en ‘Rule VL Breach of Express Warranties es warranties by the warvantor, the DYE? he goods Topared or its purchase price however, hatin ese the TEES Gon daye be either the warrantor or his representative. ‘The Iaeyday period, however, may be extended by conditions THidharcbayeod the contre ofthe warrantorarhisrepresentative Orb agrecment ofthe pakis.ction 2 Proportions Reduction in Refnd of Parchane ‘Price — In case refu oi ‘oF the nomeonformiy shall be ‘Male VI. Consumer Service Warranties ‘Section 1. Implied Warranty in Supply of Consumer Services forthe supply ofscrvcestoaconsumer made torely,on the seller's silo ude Section 3, Quaranteof Service Firms — Serves firms shall prove unreasonable to expect the service guarantee to lst ninety (0) days ‘Rule VILL Prohibited Acte csatonce ofa warranty Chapter IV LABELING AND FAIR PACKING Rule I. Coverage Section 1. Coverage —The fllowing Rales shall apply tall senmimer products sold in the Philippines whether lealy ‘manufactured or imported. Satan? eon iwi le sao sa hazardous rubatances and be promulgated and enfored rect and registered trade name or brand name. If ‘nen or brand name sreistered fr the product, the ‘ordinary name by whith ts eommonly known may be usedos the acessories and their nmercaleount shall sin the tbe, ‘The flowing shall be deemed suficientcompli- ‘ance with this requirement: 162.1. Where a product is sold in single unite, ‘ates of toxic: plsonous products, the label shall alo exntain {he fllowing information:1.51, Direction for use or assambly, which shal be in able werd. Artisti, graphical repre rations may be sed in nition tothe fontents of express warranties as required by the preceding Chapter shall appear onthe label 15: Complicated moshaniea, cletricl or electronic app ances equipment orpreductstobeaseembledandthoee needing further assembly shal contain the following informaticnl. 22, Where tho buyer himealf provide the container fr his ‘purchase of consumer product retailed in small quantities, ule V. Information as to Compliance to Standards rig information shall appear "many secondary display panel: erewarnings rerequiredtoboplacedinthelabel, be rade in such way that they shall appear sore ros than all the oder words the label ‘See. Labeling Requirement inthe Principal Display Panel. 4Se 5. Labeling Regrets in the Principal Secondary Display Panels or in the Literature. re ‘or by an agency ofa foreign government. Se Aula of Ltertere fr Berta by Baer — “LI Are engaged inthe packaging or labeling of ach pod. 1L2.Preserbe or specifyby any means the manner in which such product are packaged or labeled; or 1.3, Having knowledge, refuse to disclose the souree ofthe sislacled or mispackaged products Ses. 2 Proibtion othe Words:"No return, No exchange.” — ‘Thewords:"Nereturn, Noeachange,orany other wordstosoch ‘fect shall no: appeat on any label or litratare of @ ensumer ‘rodct or en any rectpe forthe purchase of ewch prodisc PACKAGING Role VIL Size and Characterization of Packaging for ‘Consumer Products Section 1.Fair Packaging. — The packaging of consumerSee 5. Pockagingof Basic Necessities — Basle necessities shall nt se non functionally slack Silled packaging. sceurately represent the product in the ule VIIL Protection of Packnged Consumer Products Section 1. Protection of Product through Packaging. —The fand unstable terms, See. 4 Dangerous Packaging. — Where the packaging of owes danger to persons or property ‘ ngor disponal awarningorindiention stta what improper use handling disposal shouldbe avoided, ‘hall be provided on tho pockaging iss: Whenever posible, ‘irs-idtrestmentsandinformation when tisnecessary take {he vitim to phyeican shall also be provided in the package labeling. Role X. Price Tag Requirement on Consumer ‘Products & Services align Pres Tat RequirementorallCnumer Prodi in retail to the ries of prodacts whieh they reprosent, Sec. 8, Prive Tag Requirement for Lumber.—In the aso of aged or offered forsale tothe publi, the same ind indieating theron the price and the‘See, A. When Price List May be Allaved. — Pries of eon- Sec, 2, Use of Codes. — Prices of consumer products and service hall not be writen in code except in adition to price {tags labels, markings or pres lists as provided for in these Rules Tistein pesos ex ‘products tobe tld in foreign curreny asin thecasoof ty free Chapter V LIABILITY FOR PRODUCTS AND SERVICES [Rule I. Coverage Section 1 Coarage.—Thefellowing Rule shal apply toll rmanifactore's, producer, builders or importers of consumer Legal ervies andthe lke shall not be included within the coverage of fregeng Rules and all the other pertinent rules ale IL Lishility for Defective Products Sec. 2, Exception — The manufacturer, builder, producer aRole IL Liability for Product Quality Imperfection Section Liability of Supplier. — Supplier shallbejointly Tiable fo imperfection n quality of consumer products, ‘ec. 8, When ia Thare Product Imperfection. — With do rex king from their nature, the fllowing 23, When the consumer ora third party issolely at fault for the daft. products unfit ornadequate for ston for whieh they are designed or43.3. A proportionate reduction in the price of the product in the consurer shall retain ownership and possesion Sipplemented or reimbursed by the party which cased the damage, without prejudice tothe provisions of Rule V. Rule IV. Liability for Product Quantity Imperfection Section 1. Supplier Jointly Ligble.— Where there anemone 2.1. When such quantity variations eo inherent oF sm henaturect he product and isnot non-fnetion ‘See 8. No quant shallbe llowedin products packaged in sets and those products which are sold in eomponents or with Set eneiesof Consumer in Cues of Prout Quanity “25. The placement ofthe product by another ofthe same te model, withot the quantity imperfection: Pro ravithout prejudetolosesanddamagesany. sacement is Not Possible, —"The provisions ofthis Chapter shal slo apply to product ce 6 For proucts packaged in sets and these profes oe Pa cmap ecessories, the remedies:ale V. Notification Requirement for Product Quality rd Quantity Imperfections fotifeation. — The consumer shall notify the perfoction nthe quality andor quantity fhe ‘there the supplier unresconably delays such inspection, the ‘resading section but eich term shall no than one hundred eighty (180) days ‘Rule VI Liability for Defective Services quate information onthe Frat mofbetter quality services other for Service Quality Imperfection vided in the ofer or advertisement= The service Sec. 3, Remedies of Consumer in Cases of Service Quality LInperfections and Improper Services. — The consumer shall altarnativelyathisoptionthefollowing ofthe service, where applieabe, buraement ofthe amount paid, with mentary updating wiheo peje a leserand damage, any.or 13, Proportionato reduction in price. Sec. 4, Performance ofthe Service by a Prd Party. — The ‘modelasprovdedin hemansfactorerstachnieal specifications ‘intratual exoneraton of the roppler does nat negate such suarente, Rule XIIL Liability There it More Than One Supplierperformance or usecf the preduct or service Rule XVI Limitation on the Liability of the Manufac- (Chapter VI ADVERTISING AND SALES PROMOTION Rule Coverage ‘Section 1. Coverage — The following Rule shall apply tothe ‘advertising and tales promotion of all consumer products and fervices Pred, That with respect to food, drugs, devices, feumetics anc hazardous substances and agricultural products, the same shall be under the jrisdiction ofthe concerned de- partments. ‘the lke shallbe erompted from the coverage of these rules. ‘Rule IL. False, Deceptive and Misleading Advertise- ‘ments Section 1 Prohibition on Fale, Deceptive and Misleading Sirealy or fadrecty th posh of conmur prods Sec. 2 When Advertisement is Folse, Deceptive and Mis- leading. — An advertisement skal be fale, deceptive or mis- leading i tt natin conformity withthe provisions of the CConsutner Act ofthe Philippines or i itis misleading in & ‘material respect.‘Sec. 3. Determination of False, Deceptive and Misleading determining whether an advertisements ‘Advertisement among-ather copbinat eement ‘oveal material feta in the light of such ‘ropreaentallongyormaterialowithreapects consequence wih ‘ay rel rom the uae or application of consutnr produto Servicestowhichthe advertsomentrelatesunder the conditions Dretribed in said advertisement, or under sath conditions a8 ‘re customary or usual ‘ule IIL Truth and Accuracy in Advertising Section 1. Truth and Accuracy in Advertsing. — Any aa ‘or misleading advertcaments, Sec. 2. Advertisements Depleting Product Performance Demonstration. ~ Demonstration of product performance naa Sec. 3. Special Claims. — Any advertisement which makes special clams shall substantiate rach claims and propery use ‘research resula, eientic rms statistics or quotations. Sec. 4. Use of Research, Scientifc or Suroey Findings, Discovery or Results —No research, scientieortarvey find “surveys conducted using seientiGealy accoptable methods. ‘survey finding, discovery or result Se 6 Un of Rear Perso rte fom Jara tor ign ee Bupa Nveremntsi not prohibited by any lew, “appropriate department tobe njorious, unsafe or dangerous oF ‘declared tobe imminently such,‘Rule VI. Credit Advertising 1 Raqirements fo Advesing Consumer Crt ‘materi tee shld he ro apd accompanying service, any, coveredythecredit plan, the length of ime the payments matt be made, and the perenags of downpayment, i required Rule VIL Rules on Certain Advertisements uertizementeof sales promotion eampaigns.— ‘SALES PROMOTION OF CONSUMER PRODUCTS "AND SERVICES, ‘ule VII. Additional Rules on Coverage for Sales ‘Promotion of Consumer Producta and Services{orsidered nes romain campuign ws Sed under thse ‘Rule DC Permit Requirement ‘Section i, Aplisation for Permitto Conduct sales Promotion xemoton campaign i to be conducted in ‘a sngle region, in the Department's paid. Prohibited forms of sales prom: ‘Senod oatrght Incase of disap following formation and documents:1118 Thespecicity, municipality and provineandmumber ef ireptoneor th pr nd es where ney ferme may ‘The amount of prnas foreach category of winners. IF “Tab. Such cther Informstion, documents or evidences 28 smay be roqired by the Department in order to protect the Interest of tie publi. Sec 8. Fermit Fees. —A reasonable schedule of permit foes ‘to be determined by the Secretary to cover processing and nee of ermits hal be charged Sec, 10, Bremption from Permit Requirement. — Permits {or the felling sales promotion activities need not be applied for: eo10.1, Compstitons exept beauty contest conducted nation- ‘Provided, however, that soles promotion campaigns ex- ‘emped from the permit requirement shall be subject to all the ‘ther pertinent rales and regulations on sales promotion eam- signs [Rule X. Sales Promotion and Other Prohibited Acts ‘hereof or attachment Uhre shall be allowed nora perm be ‘issued therefore, Seg. Other nei ate product achome, or activity prohibited or de {ntematinel eles promotion, and such promotion is prohibited {in thePhilippnes, the lea distributor ofthe sume shallindicate ‘Promotion Campaign Impostblefoallthe pantera tocontinueto deliver tne productspromotion; “45. The time, date, and place of preliminary draws, pre-tom. — 8 ‘maximum of sx (6) months upon approval the Department. 182. Becoptions to Rule on duration, 181 Price reductions which shall not excoed tree (3) ‘months "222, Closing ont sala which shal not excod six (6) ‘rls on sales promation campaigns. Seo, 1, Sending. — Tha sooding of entry forms shall be ‘randomly nade without prejdice to consideration ofthe sizeof the area tobe ssedod andlor the population of targeted partic pants, Sec. 18. General Rul. — The following changes in the con- duct sale promotion empaig halle mae witout the 16,3, Duration, mechanies,prosotaes or terms and cond- tons ofthe sales promotion exmpaiens. "5. ualifieatons required ofthe participants, eriteria in ‘the determination snd slectin of winners. See. 16. The sponsor or prom ‘changes inthe ales promotion eampaign as wel asthe fact of the approval shall be published, announced or advertised atleast wie before such change is effected and in the seme ‘manner and medium thatthe sales promtion campaign war ‘announced, published or advertised bythe promoter or sponsor. tvith a deferred grand draw had been previously the Department. See. 21, Computerized Selection of Winning Computerised selection of winning entrie’number shall not be ‘used unless the program therefore ls spproved bythe Depart ‘ment upon determination ots fairness and randomness. Sec. 22 Claiming of Prise — Winners shall have atleast. ‘roughest the uration tthe promation, whether or not the supply of the preduets und 16. Percentago reduction im prices shall be computed to the nearest eentaso. However, in caso of such invalidation, another qualiied entry form shall be dar ns plae stub ta be retained by the participant for parpores of elaiming the price 2.5, Whore serial numbers on raffle tickets are provided as sscarity mark, the sume shall be conseeutive and shal 126, Drop boxes shall be properly sealed and placed in an ‘ccossible place wherein rae ‘ent weather and other destructive forces Drop boxer Collected by the sponsor or its representative and ‘Temoved the day immediately folowingthe deadline or droping ofentres. 12.7. Apartsipant may dop or send in more than one raf entry formarstub unless expressly disallowedbythemechanics of tho pronotan. 2resenting the genuine any form ‘See. 4. Competitions, — Salo promotions invelving the con- ‘participant of the promotion, no partiipant lacking of such qualifications or who ‘re-qualifention shell witnessed and verified by a representative from the Depart- See. 5, Parlor Gomes. — Sales promations involving the conduct of parlor games shall, in addition to Uhe rules on 3. He partner pre games thle randomly and publicly sebctod from qualified home viewersstenerureadersAeviation, modification, addition or deletion shal first be sub- rovided bythe Department. Rule XV. Information Dissemination and Advertsing Section 1. Dissemination of Information Regarding Salee Promotion Campaigns. — Asales promotion intended for broad ‘manner, date, place and time for selection or ot winbern, 3e categories of winners and their corresponding [ule XVI. Presence, Verification andlor Certification by The Department's Representative Section 1 Pree and Veeton of ners bythe De a‘Ste.2 Disposition of vali, Unqualified and/or Tompered Entries.—The promoter, und sion of the Depart- ‘invalid; unqualified andlor tam. sanufactrer of he product ole XIX. Quality and Quantity Section 1. Quality and Quantity of Consumer Prodets or tion Carngoign. — Ne reduction in qua ‘radeta or services under sles Dr Dremium or benefit granted by reason of the same shell be ‘lowed, ale XX. Mode of Payment for Purchase fhe conduct of sles promotion campaigns. lureof Sponsor to Deliver To cases where the sponsor je nota‘Tite vt Makati, Metro Manila une 10,1998 (ed) Risalino S, Navarro Secretary