Department of Trade and Industry (DTI) Consumer Protection Group Undersecretary Atty. Ruth B. Castelo reminded all sellers to comply with a department order prohibiting “installment only” payment schemes after some entrepreneurs were found to be taking advantage of it.
In an interview on CNN on May 11, she said the consumer has the right to choose “not only the products and services that she/he needs, but also the mode of payment for these goods or services.”
Under Department Administrative Order (DAO) No. 21-03 issued on March 23, the DTI prohibits the “installment only” basis. The department ordered sellers to “provide consumers the options to pay in cash, in installment, or a combination of the two, whenever they make a purchase.”
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.”
Violators of the order will be imprisoned for five months up to one year and fined up to ₱10,000.
“The DTI highlights the consumers’ right to choose,” Castelo said. “The DTI reminds all sellers to comply with DAO No. 21-03 to avoid being penalized.”
After the order was issued, the complaints received by the department have dropped by 56% in 2021.
Report from Naomi Tiburcio/NGS-jlo
