AUGUST 23, 2011

NR # 2504

Lawmaker urges Congress to pass a local version of Lemon Law

A lawmaker today urged Congress to pass a local version of the United States Lemon Law to protect consumers or buyers of new but faulty motor vehicles. Rep. Lucy Marie Torres-Gomez (4th District, Leyte) authored House Bill 5017, which provides buyers with a more effective mechanism to protect their rights against defective motor vehicles within the so-called lemon law rights period or certain mileage provided under the law. The passage of this measure is long overdue. The 13th and 14th Congress adopted but failed to pass the proposed Philippine Lemon Law, Torres-Gomez said. Torres-Gomez pushed for the immediate approval of House Bill 5017 granting the Department of Trade and Industry (DTI) more punitive powers to be able to reinforce its function of protecting buyers of lemon cars. According to Torres-Gomez, while Republic Act 7394, otherwise known as the Consumer Protection Act, provides for the protection of consumers from scheming manufacturers and defective products, its consumer-protection mechanism for lemon vehicles still leaves much to be desired. In fact, Torres-Gomez said, statistics show that of an average of 100,000 units of automobiles sold per year, 100 are reported to be suffering from factory defects. Torres-Gomez said generally, complaints before the DTI are resolved through mediation but a grievance procedure is not enough to protect the consumer rights of automobile buyers. Most of the automobile buyers do not have enough economic surpluses for repairs and insurance participation fees, but are nonetheless constrained to allocate such unwarranted expenses for brand new vehicles, Torres-Gomez said. There is a need to install a more effective sanction against these defects, TorresGomez stressed. Torres-Gomez said the State recognizes that a motor vehicle is a major consumer purchase or investment and the consumer rights should be clearly defined including the means to redress for violations. The State promotes full protection to the rights of consumers in the sale of motor vehicles against sales and trade practices which are deceptive, unfair or otherwise inimical

to the consumers and the public interest, Torres-Gomez said. The bill shall cover all brand new motor vehicles with non-conformity reported by the consumer within twelve (12) months from the date of original delivery to the consumers or twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first. Under the measure, it shall be the responsibility of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the motor vehicle and the notice of nonconformity required under the Act, to attend to the complaint of the consumer including making the repairs and undertake such actions to make the vehicle conform to the standards or specifications of the manufacturer or distributor for such vehicle. To compensate for the non-usage of the vehicle while under repair and during the period of availment of the Lemon Law rights, the manufacturer shall provide the consumer with a reasonable daily transportation allowance, an amount which covers the transportation of the consumer from his or her residence to his or her regular workplace and vice versa, equivalent to an air-conditioned taxi fare or a service vehicle at the option of the manufacturer, distributor, authorized dealer or retailer. If the consumer remains unsatisfied with the dealer-manufacturer's efforts to repair the vehicle, the consumer may file a complaint before the Department of Trade and Industry (DTI). Under the measure to be known as the Philippine Lemon Law of 2011, the DTI is mandated to exercise exclusive and original jurisdiction over disputes. In case a nonconformity of the vehicle is found by the DTI, it shall rule in favor of the consumer and direct the dealer-manufacturer to replace the motor vehicle with a similar or comparable motor vehicle in terms of specifications and value, subject to availability and accept the return of the motor vehicle, paying back the consumer the purchase price plus collateral charges. Torres-Gomez said a P100,000 fine shall be imposed on car manufacturers, distributors or dealers who violate the disclosure agreement. (30) lvc