EDUARDO, Ray Bradley B.

CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XI: NO SHORTCHANGING ACT

All consumers strive to earn money for their sustenance and maintenance. They know the
importance of it, especially their everyday needs such as basic necessities and prime commodities.
Indeed, every cent counts, but business establishments either intentionally or negligently fail to
give the exact change. As a consequence, consumer purchases result in agitation or even
intemperate altercation. To discourage business establishments from doing such an act, Congress
passed a law that penalizes the same with increasing fines according to the gravity or habituality
of its commission.

Under RA 10909 or the Shortchanging Act, it is unlawful for the business establishment to
give change in any form other than legal tender. This means that business establishments cannot
give, for example, candy as a change for any excess payment. Business establishments cannot also
ask the consumer to be exempt from paying the change or to “keep the change.” The consumers
have every right to demand the exact change and may file a complaint before the DTI should
business establishments fail to comply. The cashier personnel also must count the change in front
of consumers, and the latter should count it before leaving the premise. Consumers must always
check the receipt when they receive the change to validate the correct amounts of their respective
purchases.

Business establishments may be liable for a fine amounting to Php 500.00 up to Php
25,000.00 with revocation of business license. They should give the shortchange amount to the
complainant as soon as a favorable judgment was rendered for the latter. Because of this, business
establishments must do everything in their capacities to ascertain the correct amount of change
and ensure that their cashier personnel heed the provisions of the law.
EDUARDO, Ray Bradley B.
CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XII: THE LEMON LAW

“Do not do unto others what you would not want others to do unto you.” Such a phrase is
better known as the Golden Rule of Confucius. When selling a product, business establishments
must give the exact thing the buyer had purchased the same way they would want their suppliers
to render unto them. In the market of automobiles, manufacturers or car dealers must inform their
buyers of any issues, render honesty and honor their desires. If a buyer wants a brand-new car,
then they must hand over a brand-new car. If it is brand new, the buyer has every right to expect
that it is free from any defect. However, there are still who do not abide by that principle.

The Congress passed a law that eradicates such an act, discourages and penalizes
manufacturers or car dealers from committing the same. Under RA 10642 or The Lemon Law, the
State has the duty to protect the consumers against business and trade practices which are
deceptive, unfair, or otherwise inimical to consumers and the public interest. A “lemon” is not the
citrus fruit that we might expect and that it not what the law is referring. Lemon means faulty or
defective car. It was commonly used by the dealers of the auto industry. A “brand-new motor
vehicle,” or BNMV for brevity, is a motor vehicle that has never been sold nor registered in any
government agency or operated or driven on any highway of the Philippines or outside the country.
Every part is new and secured of quality with a warranty in case of damage or hidden defects.

In case of non-conformity to the standards of the manufacturer or dealer, the consumer has
every right to relief. One of which is the right to demand repair. The manufacturer or dealer must
repair the BNMV within 15 days from the date of its delivery. The consumer only has four separate
repair attempts of the same complaint. If the manufacturer or dealer denies or fails to repair the
BNMV, the consumer may prosecute his or her claim with the DTI for mediation. If they do not
arrive at a settlement, they will undergo Adjudication with all the rights and relief under the Lemon
Law available to the parties. At the option of the consumer, he or she may demand a refund of the
purchase price. The refund amount shall include other collateral charges that come with the non-
conformity of the BNMV. In case the consumer fails to avail of the remedies under the Lemon
Law, he or she can still seek relief under RA 7394 or the Consumer Act of the Philippines. He or
she may raise a complaint for unconscionable or deceptive sales. However, consumers must
consider exercising their right to relief because if they fail to avail the remedies, they are estopped
by laches. Thus, it is better for consumers to know their rights, especially when a situation demands
their enforcement.
EDUARDO, Ray Bradley B.
CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XIII: GUIDELINES FOR PAYMENT OPTIONS

On the grand scale of things, dealers would give their clients the option to pay in cash,
credit, installment, bank financing, or in-house financing. These options are available to the clients
and consumers to help them gauge their ability to pay and secure their finances. Moreover, they
are ways that consumers may employ at their choosing without imposing much of a burden upon
them. Besides, paying is a burden in itself while the cognitive reward outweighs the dissonance.
Because of this principle, manufacturers, dealers, distributors, or producers, shall not deprive the
consumers to a single payment option alone.

As protection ensured by the State, the Department of Trade and Industries passed an order
that discourages such an act. Under the Department Administrative Order No. 21-03 or the
Guidelines for Payment Options on the Purchase of Consumer Products and Services, no person
or entity shall impose an “installment only” mode of payment to consumers. They shall have the
option to pay in cash or installment or a combination of both, where the consumer may pay partially
in cash and the remaining balance on an installment basis. As mentioned, consumers shall have
the option to pay in cash or installment. Each option has its benefit for the ability of the consumer
to pay. For cash, it demands full payment of property (be it movable or immovable) without
imposing interests or hidden charges. For installment, it does not need full payment but requires
the consumer to pay on a monthly, quarterly, semi-annual, or annual basis with corresponding
conscionable interests and without hidden charges. The difference between them is the
consideration of the consumer’s capacity to pay. Ultimately, consumers have the right to choose
their preferred mode of payment or option to pay.

Business establishments must abide by and comply with the department order of the DTI.
In compliance with the order, they should inform consumers with a poster in a conspicuous place
within their premises, and it should be confusing or misleading. They should also ensure that
consumers are not disadvantaged by the options available to them. If, for example, a consumer
asks to an employee of a manufacturer, distributor, or dealer, the latter must inform the former his
or her rights to choose a mode of payment and the employee must not deprive the consumer of his
or her right to choose. Otherwise, they may be held liable for Unfair and Unconscionable Sales
Acts and Practices under the Consumer Act of the Philippines, with the corresponding fines
ranging from Php 500.00 to Php 100,000.00 or imprisonment for 5 months to 1 year.
EDUARDO, Ray Bradley B.
CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XIV: GUIDELINES FOR PAYMENT OPTIONS

When the pandemic hit the country, all people were restricted to leave their houses as a
health and safety precaution, and business establishments ceased. The economy had declined, and
the people’s purchasing power decreased exponentially. Sole proprietors, as well as partnerships
and corporations, were unable to furnish their brick-and-mortar stores due to heightened
lockdowns and restrictions. Consequently, since people are constricted in their homes, their leisure
time includes binging on television, reading a book, calling friends, and, especially, surfing the
web and scrolling through their Facebook, Instagram, Twitter, or Tiktok accounts. Most of them
had extensive screen time just by scrolling through their phones. With this, businesses have
realized that they can reach the market with the use of information and communications
technology. Thus, they developed a way utilizing applications that allow them to post their
products without requiring the general public to visit their brick-and-mortar stores. However, on
the part of the consumers, they felt that these online transactions are not secured and businesses
are not paying taxes regularly with the use of technology and internet. That was easily disputed
since business establishments were not allowed to engage in online transactions without a permit
from the government, and it is still being enforced today.

Under the Joint Administrative Order No. 22-01 Series of 2002 or the Guidelines for Online
Businesses Reiterating the Laws and Regulations Applicable to Online Businesses and Consumers,
the government desires to encourage consumers to have confidence in Electronic Commerce
Transactions with businesses. The JAO also provides for guidelines to ensure that businesses
engaged in e-commerce are trustworthy and with a legal permit to operate. Moreover, the JAO
believes that the level of confidence the consumers have for such transactions redound to the
progress of fair economic stability of the country. The Order covers not only online stores but also
offline stores. In addition, the Order also reiterates that the discounts, such as PWD/Senior Citizen
Discounts, and other VAT Exemptions made available by the offline or brick-and-mortar stores
can be availed of by the consumers in e-commerce transactions without prejudice to the consumers.

The Order further provides that business establishments must secure their business permits
or corresponding licenses before engaging in e-commerce transactions. The consumers have to
ascertain whether a product that they purchased lacks stickers or emblems that signify safety or
compliance with the regulations of the government. For example, a pharmaceutical business or
pharmacy cannot in any chance sell medicines online without complying with the Guidelines of
the DOH, particularly under Administrative Order No. 2012-0007 as amended. Otherwise, in case
they sell their products to the consumers, the latter may demand refund of the sum of money paid.
Failure to observe the duties and responsibilities provided under the Order may result to an
imposition of a fine ranging from Php 5,000.00 but not more than Php 1,000,000.00 or
imprisonment of not less than 6 months to 15 years.
EDUARDO, Ray Bradley B.
CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XV: DTI SENIOR CITIZENS’ DISCOUNT ON BASIC NECESSITIES

Every year is a milestone worthy of thanksgiving to the Divine Providence. As people get
older, more experiences are attained and wisdom enshrined. Their knowledge is as significant as
a cornerstone of a home. It helps teach good manners, prepares the youth for challenges, establishes
the morals and principles of the family as the fundamental social institution of the State, and
contributes to nation-building. As gratitude for their contributions, the government grants them
exclusive rights and privileges. One of the privileges is the Senior Citizen Discount which is the
focal discussion of the chapter.

Under RA 9994 or the Expanded Senior Citizens Act of 2010, senior citizens refer to any
resident of the Philippines at least sixty (60) years of age. Dual citizens are covered by the law,
provided that resided in the Philippines for at least six (6) months. In addition, the law affords
special discounts for senior citizens on purchase of basic necessities and prime commodities,
subject to the guidelines of the DTI and the DA. Retailers, excluding retailers such as wet markets,
food stalls, and food vendors, shall entitle consumers to 5% or 20% discount. Why are there
different discount rates? The discount rates depend on the type of goods or service that consumers
purchase or avail. Senior citizens are amenable to 20% discount rate and VAT Exemption for the
following: medicines and medical supplies, vaccines, fare for land transportation, domestic air
transport services, hotels, restaurants, cinemas, and funeral and burial services, while the 5%
special discount covers basic necessities and prime commodities like rice, egg, bread, milk, coffee,
sugar, salt, soy sauce, vinegar, soap, candle, and those stated under Sec. 1 of the Joint
Administrative Order No. 17-02 Series of 2017. In case a senior citizen cannot purchase
personally, an authorized representative may do so on his or her behalf to avail the discount rates,
provided that he or she presents the Senior Citizen ID issued by the OSCA with an authorization
letter duly signed by senior citizen principal. Failure to comply with the rules shall be held liable
to pay a fine or suffer imprisonment or both.

The Congress also grants privileges to Persons with Disabilities or PWDs. Under RA
10754 or An Act Expanding the Benefits and Privileges of PWDs, they are entitled to the same
privileges granted to Senior Citizens. They are entitled to the 20%-discount for the items specified
in the preceding paragraph, as well as the 5%-special discount rate. It must be noted, however, that
the privilege is not available if the business establishment or retailer gives a higher discount. In
case a person is a senior citizen and a person with disability, he or she can only avail of one discount
as either a senior citizen or PWD. Failure by the business establishment or retailer to comply with
the rules shall pay a fine ranging from Php 5,000.00 to Php 200,000.00 or be imprisoned for not
less than six (6) months but not more than two (2) years or both.
EDUARDO, Ray Bradley B.
CLEP 2
Atty. Galahad Pe Benito

SUMMARY OF XVI: GUIDELINES OF BANGKO SENTRAL NG PILIPINAS

With the growth of e-commerce, consumers are leaning towards digital transactions and
finding it more convenient than the traditional cash transactions. Examples of which include
Paymaya, Online Banking Applications, Gcash, e-Wallets, and the like. However, considering
such a rise and demand for e-commerce transactions, people with ill-motive schemes take
advantage of consumers’ ignorance. Worse, people with skills on Information Technology use
their knowledge to scam others and hack their systems to steal electronic money.

In order to protect the interests of users, the Congress passed a law that regulates digital
transactions and penalizes violations of one’s interest. Under RA 11211, the Bangko Sentral ng
Pilipinas shall promote high-quality financial services for the general public. Under BSP Circular
No. 1048, Series of 2019, the Bangko Sentral shall initiate programs to educate the general public
on matters relating to finance, fair treatment, protection of client information, and transparency.
Certainly, the BSP has the duty to create awareness on financial security. However, it is a shared
responsibility with the consumers to protect the integrity of digital transactions.

The Circular also protects consumers against scams such as Phishing, Spoofing, and
Vishing. Phishing is committed when a scammer uses a fake or duplicate domain name of a
legitimate financial institution to persuade or deceive consumers to reveal their accounts. Spoofing
is when a scammer creates a website as if it was a legitimate financial institution. Vishing is when
a scammer uses voice calls, voice messages, or other means to disguise himself or herself as an
employee of a legitimate financial institution. To avoid such scams, consumers must know the
type of scam employed by the scammer, verify the legitimacy of the scammer’s operation, secure
their personal details and not give the same on demand, and follow the guidelines provided by
their respective financial institutions. In case a consumer fell victim to one of the scams, he or she
may report to the BSP as part of its Consumer Assistance Mechanism or CAM to impose penalty
or prosecute a criminal action against the scammer.