THE trade department said that the guidelines on payment options—in line with its mandate of consumer protection—will take effect on Friday, April 23.
In a statement on Tuesday, the Department of Trade and Industry (DTI) announced the issuance of Department Administrative Order 21-03 or the “Guidelines for Payments Options on the Purchase of Consumer Products and Services.”
The DTI said its order is in accordance with Republic Act 7394 or the Consumer Act of the Philippines.
The department, under this policy, is tasked with protecting consumers against “deceptive, unfair and unconscionable sales acts and practices and false and misleading advertisements, among others.”
The order directs registered and unregistered individuals and companies engaged in selling products and services to provide consumers the option to pay in cash, in installment, or a combination of the two.
The DTI emphasized that the “installment only” mode of payment is not allowed.
The guidelines also mentioned that no additional charge should be incurred if the transaction was settled through debit, credit or prepaid cards, QR (quick response) codes, electronic fund transfers or other digital means available.
“No interest shall be due unless expressly stipulated in writing in accordance with Article 1956 of the Civil Code,” the guidelines noted for consumers opting to pay in installment. The seller, meanwhile, should not impose interest rates that are higher than the market-oriented interest rates.
In addition, the seller is not allowed to collect a year-worth of interest in advance. The seller is also mandated to release documents proving ownership of the buyer for bigger items and to comply with the requirements should the goods be repossessed.
“The DTI highlights the consumers’ right to choose not only on products and services that she/he needs but also the mode of payment for these goods or services. The DTI reminds all sellers to comply with DAO 21-03 to avoid being penalized,” DTI Consumer Protection Group Undersecretary Ruth B. Castelo said.
Violation of this policy has a penalty of imprisonment for five months to one year or a fine amounting to P500 to P10,000, or both.