Responding to various consumers inquiries on modes of payment on their purchase of products and services, the Department of Trade and Industry (DTI) issued Department Administrative Order (DAO) No. 21-03 or the “Guidelines for Payments Options on the Purchase of Consumer Products and Services,” which took effect on April 23, 2021.
The order mandates all persons and companies, whether registered or unregistered, engaged in the sale or offer for sale of consumer products and services, to provide consumers the option to pay in cash, in installment, or a combination of the two, whenever they make a purchase. An “installment only” mode of payment is strictly prohibited. Further, the guidelines specify that there should be no additional charge on the selling price if the mode of payment is through debit/credit/prepaid cards, QR codes, electronic fund transfers, or other digital means available, as preferred by the buyer.
For consumers who choose to pay on installment, the guidelines state that “no interest shall be due unless expressly stipulated in writing in accordance with Article 1956 of the Civil Code” and that the seller shall not impose an interest rate more than the market-oriented interest rate. In addition, the seller must not collect an advance interest of more than a year. For bigger items, the seller is required to release documents that will show ownership of the buyer and must comply with the requirements in case of repossession of products purchased on installment.
Under Republic Act No. 7394 or the Consumer Act of the Philippines, DTI is mandated to safeguard the consumers against Deceptive, Unfair, and Unconscionable Sales Acts and Practices and false and misleading advertisements, among others.
Violation of Article 52 of the Consumer Act – for committing unfair or unconscionable sales practices – provides a penalty of imprisonment for a period of five months to one year or a fine ranging from P500 – P10,000 or both, upon the discretion of the court.
DTI OIC Regional Director Leonila T. Baluyut reminds consumers to report similar acts to the agency so that the agency can verify them. Consumers can also call the DTI Hotline 1384 or send an email at Consumercare@dti.gov.ph or visit the nearest DTI office.