DTI says surcharges on Credit card buys, illegal

SO who said paying through your credit card is more expensive than paying cash? Commercialized Christmas has become a parent's nightmare. And when the embarrassing situation of draining your wallet comes, out comes the plastic credit cards, the last things you'd flash because you thought buying through that is more expensive. But it really is not, says the law. In fact, the Department of Trade and Industry (DTI) says that the rules on price tags and labels, has a provision against surcharges, additional, extra or whatever imposition for use of credit or automated teller machine (ATM) debit cards when they are used for payments of consumer products or services.

The DTI, in an advisory cited the provisions of the Consumer Act of the Philippines and the Department Administrative Order No. 10, series of 2006 as supportive of the claim against retailers adding unnecessary surcharges. “Section 3 of Department Administrative Order #10 series of 2006 says business practices relative to the mode of payments must be considered to determine compliance of the Price Tag Law”, it says. It adds “when a consumer pays in cash, he shall pay only the price indicated in the price tag as with paying through credit, ATM or debit card. Furthermore, it states that “when a retailer offers the consumer an option to pay in cash, card or on installment, the same is allowed provided the payment options shall be disclosed by way of separate information to the consumer but not in the price tag.” A tag indicating two prices, one; a separate cash and another credit price tag on each product is not allowed. Moreover, a tag indicating a separate cash price and another card price tag on each product or service is also not allowed, according to the law.

In this case, when retailers honor, accept credit, ATM and debit cards for payment, Section 5 of the law states that these retailers are prohibited from requiring cardholders to pay a surcharge, extra charge, or additional charge over and above the price tag on the consumer goods and services. Article 95 (b) of the Consumer Act states that any person who violates the provisions for the first time shall be subject to a fine of not less than P200T but not more than P500T or by imprisonment of not less than a month but not more than 6 months or both, at the discretion of the court. A second conviction shall carry with it the penalty of revocation of business permit and license.

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