DTI to issue notice prohibiting ‘payments only’ systems

During yesterday’s Senate Blue Ribbon Committee hearing, Commerce Secretary Ramon Lopez said a cabinet order is already in the works prohibiting the “payout-only” practice of certain motorcycle dealers.

According to some of the complaints filed with the Department of Trade and Industry (DTI), some dealerships only sell a motorcycle to a customer if the customer agrees to an installment plan. The installment plan is pushed even if the customer has the ability to purchase the motorcycle with cash. Those who declared, claim that this method could generate higher profits due to high interest rates.

“Perhaps it is better to ask [motorcycle] resellers if they really give customers the options [cash or installment] because we, the DTI, will issue a ministerial order to address these complaints against the installment programs only,” Lopez said.

The Commerce Secretary said the department’s order will essentially state that dealers have a duty to notify and provide the customer with their installment plans if the customer does not have the ability to pay cash, and to accept the cash payment or full payment for the motorcycle if the customer has the capacity to do so.

Lopez added that the DTI’s Fair Trade Enforcement Office has so far registered 3,060 complaints related to motorcycle sales.

Some of the most common complaints are non-release of motorcycle registration documents (OR/CR), lemon units (defective), non-release of full payment certificate and installment only policy of certain dealers.

Of the 3,060 complaints, only 287 were resolved by mediation, representing a resolution rate of 9% by the DTI.

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