Motorbike price on installment payment is 25% higher than cash – DTI – Manila Bulletin
According to Secretary of Commerce and Industry Ramon M. Lopez, the price of motorcycles sold on installment payment is 25% higher than the cash price of the unit.
Lopez said this was uncovered by the DTI while conducting public hearings on the draft memorandum circular that will promote payment options in consumer transactions and ban the sale of goods and services only by installment. .
According to Lopez, the price difference of motorcycles in installment payment is 25% higher than the price of payment in cash. The higher prices of the installment payment unit are due to the high interest rate, he said.
Lopez stressed the need to give consumers the choice to pay cash to save costs, especially if they have savings to pay for purchases in cash.
From January 2019 to January 2021, the DTI received 3,060 consumer complaints regarding the installment payment option only implemented by motorcycle dealers and shops. Complaints have reported that the motorbike seller insists on paying in instalments even though he is willing to pay the full value in cash.
Consumers should have payment options when purchasing products and services, noting the practice of a number of retailers of requiring installment sales only, the DTI believes it is necessary to reiterate the applicable provisions of the Consumer Law of the Philippines and other relevant laws to ensure that consumers are adequately protected.
To address this concern, DTI Consumer Protection Group (CPG) Undersecretary Atty. Ruth B. Castelo explained, “The DTI is stepping in to address this consumer concern about limiting their payment options not only for motorcycles, but also for other products and services they need.”
Deputy Secretary of the DTI-CPG and DTI-CPAB Competitor OIC Atty. Ann Claire C. Cabochan explained: “With this circular, the DTI also aims to emphasize the consumer’s right to choose and have access to the various options for purchasing products and services, including the method of payment.
Under Section 52 of the Consumer Act (RA 7394), “An act or practice is considered unfair or impermissible when the producer, manufacturer, distributor, supplier or seller, taking advantage of the physical or mental infirmity, ignorance, illiteracy, lack of time, or general environmental or environmental conditions, induce consumers to enter into a sale or at least a transaction grossly contrary to the interests of the consumer or grossly unilaterally in favor of the producer, manufacturer, distributor, supplier or seller.”
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