NO ‘installment-only payment policy’ DTI tells sellers

Makati, Philippines―Sellers are not allowed to force a customer to buy on an “installment only” mode of payment if they can afford to pay in cash, the Department of Trade and Industry (DTI) warns.

DTI Department Administrative Order No. 21-03, series of 2021 (DAO 21-03, s. 21-03) has been issued in response to several complaints against businesses especially motorcycle and vehicle dealers implementing the ‘installment only payment policy’.

The guidelines state that consumers should be given payment options such as cash or installments or a combination of cash and installments.

This is part of the protection accorded to consumers against deceptive, unfair, and unconscionable sales acts and practices and false and misleading advertisements, under Republic Act No. 7394 or the Consumer Act of the Philippines.

Sellers cannot insist the installment option of payment if consumers can buy the products or services on cash basis.

Added to that, the selling price will remain the same or no additional charge should be collected 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.

Violators on the mentioned guidelines shall be penalized with imprisonment for a period of five months to one year, or a fine ranging from PhP500 to PhP10,000 or both, if found guilty.

Meantime, payment options available must be posted in a noticeable place within the premises of the business enterprise and presented in a manner that can easily be understood by consumers.

It may also be posted in their website or mobile app where the payment options are among the information readily accessible.

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