House committees OK bill to protect buyers of 'lemon’ cars

MANILA, Philippines - Two committees of the House of Representatives have approved a proposed "anti-lemon law" that seeks to protect buyers of defective brand-new motor vehicles. The bill titled "An act strengthening consumer protection in the purchase of brand-new motor vehicles," was approved by the House committees on transportation and on trade and industry last April 30. It is a consolidation of House Bill Nos. 7, 469 and 763 separately filed by Reps. Manuel E. Zamora of Compostella Valley, Monico O. Puentevella of Bacolod City, and Junie E. Cua of Quirino. The proposed Philippine Lemon Law, which is designed to add more teeth to the Consumer Protection Act, guarantees purchasers of "lemon" vehicles to have his automobiles serviced up to four times with the dealers and manufacturers shouldering the cost. Consumers may also opt to demand a full refund or replacement of their vehicles. Criteria A motor vehicle is considered a "lemon" if it is new, yet found unfit, unreliable or unsafe for use. Under the proposed measure, a car is a "lemon" if — within a so-called Lemon Law Rights Period — it has been subject to repair four times, to no avail. The Lemon Law Rights Period is defined in the bill as a period ending 12 months after the date of the original delivery of a brand- new motor vehicle to a consumer, or the first 20,000 kilometers of operation after such delivery, whichever comes first. After four attempts to repair it, a newly purchased vehicle is considered a "lemon" if it retains "a serious safety defect or condition that substantially impairs the use of a brand-new motor vehicle," hence, "cannot be repaired." Excluded are conditions resulting from a consumer’s non-compliance with his obligation under the warranty, unauthorized modification of the vehicle, abuse or neglect, and damage due to accident or force majeure. Hopeful It will be recalled that the same bill was filed in the 13th Congress. The Senate and the House approved it on third and final reading. But while the Senate ratified the bicameral conference committee report on the bill, the House was unable to do so. Mr. Puentevella, chairman of the committee on transportation, expressed hope that, this time around, the House and the Senate of the 14th Congress will be able to pass the bill into law. He said the proposed law should make up for the shortcomings of Republic Act No. 7394, or the Consumer Act of the Philippines, in protecting buyers of new, but substandard vehicles. Assurance "While the car manufacturers’ organizations in the Philippines claim they recognize their contractual obligation despite the absence of our own version of the ’lemon’ law, our consuming public needs the assurance for the protection of their rights," he said. Mr. Puentevella’s opinion was shared by committee on trade and industry chairman Rep. Antonio C. Alvarez of Palawan (1st District), who added that the measure will "provide relief to consumers as they will get the full value of the financial investments they have made in purchasing their new vehicles." Mr. Puentevella said vehicle manufacturers are becoming negligent and non-observant in maintaining the quality standards of newly fabricated units because of heavy demand for new cars. "Consumers, not only in the Philippines but all over the world, keep on complaining about the defects of the new vehicles that they have purchased, claiming their unfitness and unsafe conditions," he said. Procedure Trade Secretary Peter B. Favila and the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) have expressed their support for the proposed "lemon" law, with the latter even providing inputs to the bill. Mr. Favila, in a position paper submitted to the committees, said the bill would "strengthen consumer protection and guarantee value for the people’s hard-earned money." The proposed "lemon" law provides that the Department of Trade and Industry (DTI) will exercise exclusive jurisdiction, via mediation or arbitration, over disputes arising from enforcement of the new law. The DTI, which will determine the validity of a complaint filed by an unsatisfied car buyer, is mandated to strictly observe the principle of negotiation, conciliation and mediation towards amicable settlement between the manufacturer or distributor and consumer. However, in the event there is a failure to settle the complaint during the mediation proceedings, the parties may voluntarily enter into arbitration proceedings, in which the DTI will determine whether or not the subject vehicle conforms to established standards and specifications. - Elizabeth T. Marcelo, BusinessWorld