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Consumer Group warns of revival and proliferation of “deceptive and aggressive sales marketing practices “

 Laban Konsyumer Inc., thru Atty. Victorio Mario A. Dimagiba, endorsed a consumer complaint to the Fair Trade and Enforcement Bureau of the Department of Trade and Industry as well as to the Food and Drug Administration. The complaint involved “ deceptive and aggressive sales marketing practices “, which is similar and identical to what was held by the Supreme Court in the Aowa Electronics Philippines as a violation of the Consumer Act of the Philippines and ordered the permanent closure of the business in the country.  

The complaint was regarding the Violation of the Consumer Act of the Philippines (R.A. 7394), More particularly, Article 50 Prohibition against Deceptive Sales Acts or Practices.

In the sworn complaint submitted and acknowledged receipt by the DTI Fair Trade Enforcement Bureau,  it was mentioned that “The scheme employed by the respondent whose Filipino sellers stationed in malls giving free facial vouchers in order to entice customers to enter their so-called “clinic” and later referred to a foreigner who is adept in selling very expensive beauty products by using same sales pitch is fraudulent.”

In the complaint, it was stated that “The foreigner had the intention of deceiving the customers from the very start by pretending to be affiliated with the owner of the company by lying to be the owner’s wife, acted that she was calling the owner on the phone to approve of the big discount then later on admitted in her counter affidavit that she is just a trainor of the company. Selling products which they claimed to be of high quality and standards at P350, 000 per set then later on found out that lower prices were given to other customers is also deceptive.”

The letter wrote “The foreigner asked for credit cards just to check the balance then later on coming back with the card already charged, depleted the full amount, swiped repeatedly even when denied and receipt ready for signature are very deceptive and should not be practiced by any company.”

The complaint also cited Article 52 Unfair or Unconscionable Sales Act or Practices. “The modus operandi together with its claim and promise that one-time purchase will give lifetime result is clearly deceptive, false and misleading. Their scheme takes advantage of the consumer’s physical or mental infirmity, ignorance, lack of time or the general conditions of the environment or surroundings.”

It was also pointed out that “This is done by misrepresenting to the customer that she is given a free facial, the facial did a wonderful job and customer will be an endorser of the expensive products claimed to be of high quality when in fact some products are not even registered in Food and Drugs Administration and do not give satisfactory result as evidenced by many complaints. The seller  pretending to give huge discount and giving out more freebies to sell their so-so products then later on finding out that other customers were given much more discount and more freebies is unfair. This could have been prevented if they are using price tags or showing customers their price lists (Article 81 Price Tag requirement).”

The complaint went on to detail more than 100 complaints against them with DTI in the National Capital Region alone in less than two years. Even the foreigners working for them may not have the necessary Alien Employment Permit or 9G visas required to work legally in the Philippines because all their applications for AEPs were denied due to misrepresentation or the company’s inability to meet the labor market information tests.

The respondent has also pending complaints on adulterated and mislabeled products with FDA and with BIR on issuing receipts with no price, no total amount, issuing official receipts instead of invoices and sometimes not issuing receipts at all.

As Attorney Victorio Mario Dimagiba said in his letter of endorsement to Director Domingo Tolentino, “The modus operandi is identical and similar to that of Aowa Philippines which had been decided by the Supreme Court in the case of Aowa vs. DTI, as a textbook case of violation of the Consumer Act.”

The consumer group was informed that the complaint has been referred to the Food and Drug Administration’s Field Regulatory Operations Office for the conduct of Inspection and Product Information File Audit to validate the report.

“LKI was thanked for informing the Food and Drug Administration (FDA) and providing details regarding this matter. The group was told to be rest assured a feedback report will be provided once investigation is done.” 

Laban Konsyumer Inc. (LKI) is a nonprofit and non-stock registered entity with the Securities and Exchange Commission. LKI is a consumer advocacy group in the Philippines that promotes consumer education and protection against deceptive, unfair and unconscionable business practices. The LKI focuses on education, prices and supply of basic and prime commodities, standards and qualities among other areas of consumer protection.

LKI is a new member of Consumers International, a membership organization for consumer groups around the world. Consumer International is composed of over 200 member organizations in more than 100 countries to empower and champion the rights of consumers everywhere. Dimagiba also acts as Chairman of the International Organization for Standardization (ISO) Consumer Policy Committee (COPOLCO) of the Philippines. LKI had a pending application with the Department of Trade and Industry for recognition as a national consumer organization filed in November 2018.