Payment schemes for car or motorcycle buyers have often been limited to installment plans recently. The issue was raised all the way to Senate in February when it came to light that motorcycle dealerships were being sold solely through financing packages—with a 5% monthly interest rate to boot.
Now, the Department of Trade and Industry has taken steps to ensure buyers have more options with the Department Administrative Order No. 21-03, or the Guidelines for Payment Options on the Purchase of Consumer Products and Services, which took effect on April 23.
The order emphasizes that consumers have the "right to choose" and as such, should be given various options, including modes of payment. This covers all entities engaged in the sale or offer for sale of consumer products and services.
It explicitly states that the mandatory provision of payment options will likewise prohibit any person or company to offer any product or service solely via "installment."
"Consumers shall be given the option to pay in cash, in installment, or a combination thereof. Denial of the right of the consumer to pay in cash shall constitute a prima facie violation of Article 52 of the Consumer Act" reads the Department Administrative Order.
"Provided that the seller is not precluded from offering a discount from the selling price if the payment is made in cash. Provided further, that the selling price shall remain the same whether the mode of payment is through debit/credit/prepaid cards, QR codes, electronic fund transfers, or other digital means that are available to consumers."
In addition, the DAO also mandates that payment options shall be posted in a conspicuous place within the business premises and must be presented in a manner that is easily understandable by consumers. Under the Consumer Act, violators will be imprisoned for a period of five months to one year or fined P500 to P10,000, or both.
The next time a dealership tries to reject your cash payments, no need to wonder whether it's illegal or not—just show them the Department Administrative Order instead.
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