FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —_)
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

3833

House Bill No.

EXPLANATORY NOTE

Republic Act 7394, otherwise known as the Consumer Act of the Philippines
was enacted almost 20 years ago, on April 13, 1992. As such, the penalties provided
for in the law are not in tune with the prevailing situation at present.

Due to the relatively low penalties provided, violators would rather pay the
penalties instead of complying with the law making the penal provisions of the law
somewhat ineffective.

\s it therefore time to increase the penalties provided in the law to give it more
teeth and to ensure that future violators would think twice and would comply with the
law.

In view of the foregoing, immediate approval of this bill is earnestly requested

x
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RUFUS B. Ri EZ
er

MAXIMO 8. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House BillNo. __ 3533

AN ACT
AMENDING THE PENAL PROVISIONS OF REPUBLIC ACT 7394, OTHERWISE
KNOWN AS THE CONSUMER ACT OF THE PHILIPPINES

Be it enacted by the Senate and House of the Representatives of the Philippines in
Congress assembled.

SECTION 1. Article 19 of Republic Act 7394, otherwise known as the Consumer Act
of the Philippines is hereby amended to read as follows:

Article 19. Penalties. - Any person who shall violate any provision
of Article 18 shall upon conviction, be subject to a fine of not less
than [One thousand pesos (P1,000.00) but not more than Ten
thousand pesos (P10,000.00) or imprisonment of not less than two
(2) months but not more than one (1) year] FIFTY THOUSAND
PESOS (P50,000.00) BUT NOT MOT MORE THAN ONE MILLION
PESOS (P1,000,000.00) OR IMPRISONMENT OF NOT LESS
THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7)
YEARS or both upon the discretion of the court. If the offender is an
alien, he shall be deported after service of sentence and payment
of fine without further deportation proceedings.

In case the offender is a naturalized citizen, he shall, in
addition to the penalty prescribed herein, suffer the penalty of
cancellation of his naturalization certificate and its registration in the
civil register and immediate deportation after service of sentence
and payment of fine.

Any director, officer or agent of a corporation who shall
authorize, order or perform any of the acts or practices constituting
in whole or in part a violation of Article 18, and who has knowledge
or notice of noncompliance received by the corporation from the
concerned department, shall be subject to penalties to which that
corporation may be subject.

In case the violation is committed by, or in the interest of a
foreign juridical person duly licensed to engage in business in the
Philippines, such license to engage in business in the Philippines
shall immediately be revoked.

SEC. 2. Article 41 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:


Article 41. Penalties.- Any person who violates any of the
provisions of Article 40 hereof shall, upon conviction, be subject to
imprisonment of not less than [one (1) year but not more than five
(6) years, or a fine of not less than Five thousand pesos
(P5,000.00) but not more than Ten thousand pesos (P10,000.00)],
FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MOT MORE
THAN ONE MILLION PESOS _(P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both such imprisonment
and fine, in the discretion of the Court.

Should the offense be committed by a juridical person, the
Chairman of the Board of Directors, the President, General
Manager, or the partners and/or the persons directly responsible
therefor shall be penalized

No person shall be subject to the penalties of sub-article (a)
of this Article for (1) having sold, offered for sale or transferred any
product and delivered it, if such delivery was made in good faith,
unless he refuses to furnish on request of the Department, the
name and address of the person from whom he purchased or
received such product and copies of all documents, if any there be,
pertaining to the delivery of the product to him; (2) having violated
Article 40 (a) if he established a guaranty or undertaking signed by,
and containing the name and address of, the person residing in the
Philippines from whom he received in good faith the product, or (3)
having violated Article 40 (a), where the violation exists because
the product is adulterated by reason of containing a color other than
the permissible one under regulations promulgated by the
Department in this Act, if such person establishes a guaranty or
undertaking signed by, and containing the name and address, of
the manufacturer of the color, to the effect that such color is
permissible, under applicable regulations promulgated by the
Department in this Act.

SEC. 3. Article 47 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 47. Penalties, exception. - Any person who violates any of
the provisions of Article 46 shall, upon conviction, be subject to a
fine of not less than [One thousand pesos (P1,000.00) or an
imprisonment of not less than six (6) months but not more than five
(5) years] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT
MOT MORE THAN ONE MILLION PESOS (P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both upon the discretion
of the court.

No person shall be subject to the penalties of paragraph (a)
of this Article for (1) having violated paragraph (c) of Article 46
unless he refuses to furnish, upon request by the Department or his
representative, the name and address of the person from who he


purchased such hazardous substances and (2) having violated
paragraph (a) of Article 46, if he establishes a guaranty or
undertaking signed by, and containing the name and address of,
the person from whom he received in good faith, the hazardous
substance to the effect that the hazardous substance is not a
mislabeled hazardous substance or banned hazardous within the
meaning of that term in this Act.

SEC. 4, Article 60 of Republic Act 7394, otherwise known as the Consumer Act of

the Philippines is hereby amended to read as follows:
Article 60. Penalties. — Any person who shall violate the provisions
of Title Ill, Chapter |, shall upon conviction, be subject to a fine of
not less than [Five Hundred Pesos (P500.00) but not more than
Ten Thousand Pesos (P10,000.00) or imprisonment of not less
than five (5) months but not more than one (1) year] FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT MOT MORE THAN
ONE MILLION PESOS (P1,000,000.00) OR IMPRISONMENT OF
NOT LESS THAN THREE (3) YEARS BUT NOT MORE THAN
SEVEN (7) YEARS or both, upon the discretion of the court.

In addition to the penalty provided for in paragraph (1), the
court may grant an injunction restraining the conduct constituting
the contravention of the provisions of Articles 50 and 51 and/or
actual damages and such other orders as it thinks fit to redress
injury to the person caused by such conduct.

SEC. 5. Article 65 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 65. Penalties. — Any person who shall violate the provisions
of paragraphs (a) to (f) and paragraph (|) of Article 64 or its
implementing rules and regulations shall, upon conviction, be
subject to a fine of not less than [Two hundred pesos (P200.00) but
not more than One thousand pesos (P1,000.00) or by imprisonment
of not more than one (1) year] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MOT MORE THAN ONE MILLION PESOS
(P1,000,000.00) OR IMPRISONMENT OF NOT LESS THAN
THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both upon the discretion of the court

‘Any person who shall violate the provisions of paragraph (9)
of Article 64 for the first time shall be subject to a fine of not less
than [Five hundred pesos (P500.00) or by imprisonment of not less
than one (1) month but not more than five (5) years] FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT MOT MORE THAN
ONE MILLION PESOS (P1,000,000.00) OR IMPRISONMENT OF
NOT LESS THAN THREE (3) YEARS BUT NOT MORE THAN
‘SEVEN (7) YEARS or both, upon the discretion of the court

The owner-possessor or user of instrument of weights and
measure enumerated in paragraphs (h) to (k) of Article 64 shall,
upon conviction, be subject to a fine of not less than [Three
hundred pesos (P300.00) or imprisonment not exceeding one (1)


year], FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MOT
MORE THAN ONE MILLION PESOS (P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both, upon the discretion
of the court.

SEC. 6. Article 73 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 73. Penalties. — Any person who shall violate the provisions
of Article 67 shall be subject to fine of not less than [Five hundred
pesos (P500.00) but not more than Five thousand pesos
(P5,000.00) or an imprisonment of not less than three (3) months
but not more than two (2) years] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MOT MORE THAN ONE MILLION PESOS
(P1,000,000.00) OR IMPRISONMENT OF NOT LESS THAN
THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both upon the discretion of the court. A second conviction under
this paragraph shall also carry with it the penalty or revocation of
his business permit and license.
Any person, natural or juridical, committing any of the illegal acts
provided for in Chapter ill, except with respect to Article 67, shall be
liable for a fine of not less than [One thousand pesos (P1,000.00)
but not more than Fifty thousand pesos (P50,000.00) or
imprisonment for a period of at least one (1) year but not more than
five (5) years], FIFTY THOUSAND PESOS (P50,000.00) BUT NOT
MOT MORE THAN ONE MILLION PESOS (P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both, at the discretion of
the court,

The imposition of any of the penalties herein provided is
without prejudice to any liability incurred under the warranty or
guarantee.

SEC. 7. Article 95 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 95. Penalties. — Any person who shall violate the provisions
of Title Ill, Chapter IV of this Act, or its implementing rules and
regulations, except Articles 81 to 83 of the same Chapter, shall be
subject to a fine of not less than [Five hundred pesos (P500.00) but
not more than Twenty thousand pesos (P20,000.00) or
imprisonment of not less than three (3) months but not more than
two (2) years] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT
MOT MORE THAN ONE MILLION PESOS (P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both, at the discretion of
the court: Provided, That, if the consumer product is one which is
not a food, cosmetic, drug, device or hazardous substance, the
penalty shall be a fine of not less than [Two hundred pesos


(P200.00) but not more than Five thousand pesos (P5,000.00) or
imprisonment of not less than one (1) month but not more than one
(1) year] FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MOT
MORE THAN ONE MILLION PESOS (P1,000,000.00) OR
IMPRISONMENT OF NOT LESS THAN THREE (3) YEARS BUT
NOT MORE THAN SEVEN (7) YEARS or both, at the discretion of
the court

‘Any person who violates the provisions of Article 81 to 83 for
the first time shall be subject to a fine of not less than [Two hundred
pesos (P200.00) but not more than Five thousand pesos
(P5,000.00) or by imprisonment of not less than one (1) month but
not more than six (6) months] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MOT MORE THAN ONE MILLION PESOS
(P1,000,000.00) OR IMPRISONMENT OF NOT LESS THAN
THREE (3) YEARS BUT NOT MORE THAN SEVEN (7) YEARS or
both, at the discretion of the court. A second conviction under this
paragraph shall also carry with it the penalty of revocation of
business permit and license.

SEC. 8. Article 107 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 107. Penalties.- Any person who shall violate any
provision of this Chapter or its implementing rules and regulations
with respect to any consumer product which is not food, cosmetic,
or hazardous substance shall upon conviction, be subject to a fine
of not less than [Five thousand pesos (P5,000.00) and by
imprisonment of not more than one (1) year] FIFTY THOUSAND
PESOS (P50,000.00) BUT NOT MOT MORE THAN ONE
MILLION PESOS (P1,000,000.00) OR IMPRISONMENT OF NOT
LESS THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN
(7) YEARS or both upon the discretion of the court.

In case of juridical persons, the penalty shall be imposed
upon its president, manager or head. If the offender is an alien, he
‘shall, after payment of fine and service of sentence, be deported
without further deportation proceedings.

SEC. 9. Article 123 of Republic Act 7394, otherwise known as the Consumer Act of
the Philippines is hereby amended to read as follows:

Article 123. Penalties. - Any person, association, partnership or
corporation who shall violate any of the provisions of Articles 110
to 115 shall, upon conviction, be subject to a fine of not less than
[Five Hundred Pesos (P500.00) but not more than Five thousand
pesos (P5,000.00) or an imprisonment of not less than one (1)
month but not more than (6) months] FIFTY THOUSAND PESOS
(P50,000.00) BUT NOT MOT MORE THAN ONE MILLION
PESOS (P1,000,000.00) OR IMPRISONMENT OF NOT LESS
THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN (7)
YEARS or both upon the discretion of the court.


Any violation of the provisions of Articles 116 to 121 shall,
upon conviction, subject the offenders to a fine of not less than
[Two hundred pesos (P200.00) but not more than Six hundred
pesos (P600.00) or an imprisonment of not less than one (1)
month but not more than six (6) months] FIFTY THOUSAND
PESOS (P50,000.00) BUT NOT MOT MORE THAN ONE
MILLION PESOS (P1,000,000.00) OR IMPRISONMENT OF NOT
LESS THAN THREE (3) YEARS BUT NOT MORE THAN SEVEN
(7) YEARS or both upon the discretion of the court. If the violation
was committed by a juridical person, the manager, representative,
director, agent or employee of said juridical person responsible for
the act shall be deported after service of sentence and payment of
the fine without need for further deportation proceedings.

SEC. 10. Article 164, paragraph (e) of Republic Act 7394, otherwise known as the
Consumer Act of the Philippines is hereby amended to read as follows:

Article 164, Sanctions. - After investigation, any of the following
administrative penalties may be imposed even if not prayed for in
the complaint:
a) the issuance of a cease and deist order, Provided,
however, That such order shall specify the acts that
respondent shall cease and desist from and shall ‘him to
submit a report of compliance therewith within a reasonable
time;
b) _ the acceptance of a voluntary assurance of compliance
or discontinuance from respondent which may include any or
all of the following terms and conditions:

1) an assurance to comply with the
provisions of this Act and its implementing rules and
regulations;

2) an assurance to refrain from engaging in
unlawful acts and practices or unfair or unfair or
unethical trade practices subject of the formal
investigation;

3) _ an assurance to comply with the terms
and conditions specified in the consumer transaction
subject of the complaint;

4) an assurance to recall, replace, repair, or
refund the money value of defective products
distributed in commerce;

5) _ an assurance to reimburse the complaint
out of any money or property in connection with the
complaint, including expenses in making or pursuing
the complaint, if any, and to file a bond to guarantee
compliance therewith,

c) restitution or rescission of the contract without damage;
d) condemnation and seizure of the consumer product
found to be hazardous to health and safety unless the


tespondent files a bond to answer for any damage or injury
that may arise from the continued use of the product;

e) AUTOMATIC CANCELLATION OF A BUSINESS
NAME;

f) the imposition of administrative fines in such amount
as deemed reasonable by the Secretary, which shall in no
case be less than FIFTY THOUSAND PESOS (P50,000.00)
[Five hundred pesos (P500.00)} nor more than ONE
MILLION PESOS (P1,000,000.00) [Three hundred thousand
pesos (P300,000.00)] depending on the gravity of the
offense, and an additional fine of NOT LESS THAN ONE
THOUSAND PESOS (P1,000.00) [not more than One

thousand pesos (P1,000.00)] OF for] each day of continuing
violation.

SEC. 11, Separability Clause — If for any reason, any part of or provision of this Act
is declared unconstitutional or invalid, such parts not affected thereby shall remain in
full force and effect.

SEC. 12. Repealing Clause — Any law, executive order, letter of instruction, rules and
regulations, circulars, issuances or any part thereof inconsistent with any of the
provisions of this Act is hereby repealed, modified or amended accordingly.

SEC. 13. Effectivity - This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspapers of general circulation,

Approved,