Consumer Rights Awareness in Angeles City

1

HOLYANGELUNIVERSITY

Consumer Rights Awareness in Angeles CityA Business Research ProposalPresented to the Faculty of the

College of Business and Accountancy

Holy Angel University

Angeles City

In Partial Fulfillment of

The Requirements for the Degree of

Bachelor of Science in Business Administration

Major in Legal Management

JocelElidEspinola

Jan Uriel David

Jannie Rivera

March 2013

APPROVAL SHEET

The business research entitled Consumer Rights Awareness in Angeles City, prepared and submitted by JocelElid E. Espinola, Jan Uriel B. David, and Jannie P. Rivera, in partial fulfillment of the requirements for the Degree of Bachelor of Science and Business Administration Major in Legal Management, have been examine and recommended for acceptance.

Carmelita Y. Lao

Adviser

APPROVAL

Accepted and approved in partial fulfillment of the requirements for the Degree of Bachelor of Science in Business Administration Major in Legal Management.

TABLE OF CONTENTS

Approval Sheet

i

Table of contents

ii

Related Literature

3Statement of the Problem

9

Conceptual Framework

11

Significance of the Study

11

Scope and Limitation

12

Methods

13Appendix A

16References

21Consumer Awareness by definition is theunderstandingby anindividualof theirrightsas aconsumerconcerningavailableproductsandservicesbeing marketed andsold. This also refers to a buyer's knowledge of a particular product or company, allows the buyer to get the most from what he buys. Consumers know more about their choices when they have product information and benefit from knowing their rights, hearing about alerts and warnings and finding out about safety issues.Consumers, by definition, include us all. They are the largest economic group in the economy, affecting and affected by almost every public and private economic decision. Two-thirds of all spending in the economy is by consumers. But they are the only important group in the economy who are not effectively organized, whose views are often not heard. This is from a congressional address of US President John F. Kennedy (1962).

At some point in our life we have experienced having troubles/difficulties in the course of our transactions, sometimes we just let it be and take the burden for ourselves and sometimes we complain about it. However, we should not be afraid because there is a law that protects consumers from unfair business practicesR.A. 7394 or also known as The Consumer Act of the Philippines. This law lays down the consumers protection, what constitutes an unfair business practice,who are responsible for the violations committed, and the remedies of the consumer.

Although we are protected by the law there are still many consumers being victimized by unfair trade practices because of poor awareness of their rights.

The study will focus in two commercial centers of Angeles City namely: SM City Clark and Marquee mall because the two are the biggest malls in Angeles City in terms of size and customer concentration.

SM was founded as a shoe store by Henry Sy, Sr., in October 1958 in downtown Manila that grew into 43 stores today includingSM City Clark. SM malls are owned by the SM Prime Holdings, Inc. a subsidiary of SM Investments Corporation that is a holding company with interests in shopping mall development and management. Marquee mall on the other hand is located beside theNorth Luzon Expressway,Angeles City,Pampanga. It is one of the 17 Ayala mallsand is under Ayala Land, a real estate subsidiary ofAyala Corporation.For the study the following words will be defined as:

Malls it would refer to SM City Clark and Marquee mall

Law it would refer to Republic Act 7394 or The Consumer Act of the Philippines

Consumer rights it would refer to those rights identified by Republic Act 7394 and the implementing Rules and Regulations of the Department of Trade and Industry

Department/Agency of the government this would primarily refer to the Department of Trade and IndustryIn our society where trading has been a common practice, there are some things that we already take for granted and pay no attention to because of the fast pace of life and various other reasons. As the saying goes; familiarity brings contempt we already tend to forget common transaction procedures like keeping the receipt, checking our purchases if they were duly accounted or void of any damages, if what we paid has no additional charges, etc. These, in turn encourage some unscrupulous vendors to take advantage of their consumers. Because of these realities and the duty of the State to protect its citizens, the Consumer Act of the Philippines (Republic Act 7394) was passed into law by Congress in 1992 and it states that it is the policy of the State to protect the interest of the consumer, promote his general welfare and to establish standards of conduct for business and industry. The law defined terms that are used for trading, provided safeguards for the consumers, provided for penalty for the violations of the prohibited acts, and prescribed the remedy available to the consumers.

In accordance with the law and the constitution, the Department of Trade and Industry said that we have eight Basic consumer rights: 1) Right to Basic Needs, 2) Right to Safety, 3) Rights to Information, 4) Rights to Choose, 5) Right to Representation, 6) Right to Redress, 7) Right to Education, and 8) Right to a Healthy Environment. In an article of the Philippine Daily Inquirer (2011), the 8 basic rights of the consumers were featured together with their definition as defined by the Department of Trade and Industry. Right to Basic Needs is that which guarantees survival, adequate food, clothing, shelter, health care, education and sanitation. With this right, consumers can look forward to the availability of basic and prime commodities at affordable prices and good quality.

Right to Safety states that the consumer should be protected against the marketing of goods or the provision of services that are hazardous to health and life.

Right to Information states that the consumer should be protected against dishonest or misleading advertising or labeling and has the right to be given the facts and information needed to make an informed choice.

Right to Choose states that the consumer has the right to choose from among various products at competitive prices with an assurance of satisfactory quality.Right to Representation is the right to express consumer interests in the making and execution of government policies.

Right to Redress is the right to be compensated for misrepresentation, shoddy goods or unsatisfactory services.Right to Consumer Education is the right to acquire knowledge and skills necessary to be an informed customer.While Right to a Healthy Environment is the right to live and work in an environment which is neither threatening nor dangerous and which permits a life of dignity and well-being.Along with these rights are the responsibilities of business owners and sellers. According to the NCAC (National Consumers Affairs Council) the five consumer responsibilities, 1) Critical Awareness, 2) Action, 3) Social Concern, 4) Environmental Awareness, and 5) Solidarity, are the obligations of the consumers. As the end-user, we are tasked to be vigilant of the products that we are going to buy. These responsibilities also give us the right to be more assertive, rather than being passive. However, no matter how assertive consumers are there are still establishments whose venture is concerned with deceptive, fraudulent, and unfair business practices. This is where the law steps in.

The Constitution has always upheld the principle of equality. As stated in Section 1 of our Bill of Rights, every person is given a right to due process and equal protection of the laws. The Constitution, considering the fact that the consumers are more ignorant, recognizes the need for their special protection. Article XV, section 9 of the 1987 Constitution provides that, the State shall protect consumers from trade malpractices and from substandard or hazardous products. This provision was included in the Constitution because, framers of the Constitution intended the consumer to have recourse against manufacturers as well as sellers of the defective and hazardous products. (Joaquin G. Bernas, The Intent of the 1986 Constitution Writers 1161, 2001). Aside from the Constitution, Congress promulgated Republic Act No. 7394 also known as the Consumer Act of the Philippines. The purpose of this law is to protect consumers interest, to enable them to seek redress in case of breach of agreement, and to facilitate fair and efficient consumer transaction (Rosario Oreta :Lapus, Consumer Rights: Fair Dealing in everyday transaction, 2001).

Republic Act 7394, the Consumer Act of the Philippines, was specifically enacted by Congress to protect the interest and general welfare of the consumer. The general provision of the act includes protection against hazards to health and safety; protection against deceptive, unfair and unconscionable sales acts and practices and provision of adequate rights and means of redress.Consumer education is one best way to safeguard the buying public from deceitful, bogus substandard goods and services. Knowing your rights as a consumer is not the only thing that you should know but also your responsibilities (De los Reyes, 2007). He also supported promoting consumer rights through campus journalism

These laws are evidently useful in the pursuit of fair trade practices. Unless there is dissemination of information to the public, such laws are as good as inexistent. That is why consumer education is also a key to propagate and to inform every buyer of his right. Consumer education is providing information to consumers to protect them from fraudulent trade practices and exploitative market operations. We need consumer education in order to build our knowledge, skills, aptitudes, values and capacity to play the role of a responsible consumer. It can also an eye-awakening for consumers for it equips them not only with useful knowledge, but also influences them in their decision-making (Consumer Education on Consumer Rights and Responsibilities).

Act. No. 3740 which is an act to penalize fraudulent advertising, mislabeling, or misbranding of any product, stockbond, etc. is also one of the laws protecting consumer rights especially the right to information. Act 3740 states that it shall be unlawful for any person, firm or corporation, either as principal or agent, to display, sell, barter, or exchange, or to offer to expose for display, sale, barter, or exchange in the Philippines; or to possess with intent to sell; or to cause to be sent, carried, or brought for display, sale, barter, or exchange from any foreign country into the Philippines, or from the Philippines into any foreign country, any article which is falsely packed, labeled, marked, or branded, or is packed, labeled, marked or branded in such a way as to misrepresent the character, amount value, contents, properties, or condition of the article contained or of the materials of which the article is composed; or any article which is accompanied by advertising matter which misrepresents the character, amount, value, contents, properties or condition of the article advertised, or of the materials of which it is composed whether or not the article or the container thereof is mislabeled, misrepresented, or misbranded among others.(Official Gazette of the Republic of the Philippines. (1930). Act 3740.)

There are also many Supreme Court cases involving Republic Act. 7394 like G.R. No. 113930.March 5, 1996 (Roberts, Jr. vs. CA), G.R. No. 124461.September 25, 1998 (People vs. Estrada), and many more. In GR No. 160422,. July 5, 2010 (MERALCOvs. Chua),The Supreme Court, Championing consumers rights, has ordered the Manila Electric Company (MERALCO) to restore the electric power connection of a couple and pay them PhP100,000 as moral damages after the power firm failed to prove that the latter had allegedly tampered their electric meter. It was very evident in the decision that the Supreme Court was looking out for consumer rights as they favored with the consumers rather than Meralco who wasnt able to justify its actions. (Rempillo, J. (2010). SC Upholds Consumers Rights over Meralco)The study aims to determine if consumers in Angeles City are aware of their rights and if so, the level of their awareness.Specifically, the study seeks to find answers on the following questions:1. How may the respondents be described in terms of:

1.1 Age;

1.2 Gender;

1.3 Occupation;2. What is the level of consumer awareness of their following rights:

2.1 Right to basic need;

2.2 Right to safety;

2.3 Right to information;

2.4 Right to choose;

2.5 Right to representation;

2.6 Right to redress;

2.7 Right to consumer education;

2.8 Right to healthy environment;3. Is there a significant difference in the awareness level of the respondents in terms :3.1 Age;

3.2 Gender;

3.3 Occupation;4. What are the recommendations that could be adopted in order to increase or improve the level of consumer rights awareness?The conceptual framework of this study focuses on the consumer rights variables and if such variables have a relationship with customer awareness in terms of DTIs 8 basic consumer rights.

The inputs for this research are the DTIs 8 basic consumer rights. These factors were all included in the survey questionnaire the researchers made that will be answered by their respondents. The questionnaires used for the data gathering for consumer rights awareness

Since the researchers want to know the awareness of their respondents regarding consumer rights the following will be used in processing and interpreting the data gathered: frequency distribution, mean rating and T-test.

Aside from comparing the awareness level of the respondents in terms of Age, Gender and Occupation, being the output of the researchers. They will also come up with recommendations to the different sectors mention such as to the business owners, consumers and the government.

INPUT

PROCESS

OUTPUTFigure .1 Conceptual FrameworkThis study is beneficial and could be important to the following:

To the Respondents (Consumers in malls in Angeles City), the study can make them fully informed of their rights and what legal remedy would be available to them. Through the study, the respondents would also know how to assert their rights and on what instances the said rights could be invoked.

To Business owners, sellers, retailers, entrepreneurs, and the like, the study will be able to inform them of their responsibilities to the consumers through the course of the transaction. They will also be able to know what practices constitute unfair and deceptive business practices so as they will be able to avoid it.

To the Government, the study will be able to help them in disseminating knowledge regarding consumer rights in order to better protect the consumers.

To the future researchers, with this study the potential researches can make use of it as their guide with the same outlook in relation to the current study. Thus, this will help them to begin further research about this matter.

To the researchers, this would give them a sense of self-fulfillment and be able to inspire them to continue their dreams of being in the field of law.

The study aims to find out if the consumers are aware of their consumer rights and if so, to determine the level of their awareness.

This descriptive study only covers SM City Clark and Marquee mall in Angeles City because they are the biggest malls in Angeles City in terms of size and consumer concentration and due to constraint in resources. As there are many consumer rights granted by the law, the study is limited to the eight (8) basic consumer rights as identified by the Department of Trade and Industry. Furthermore, the study is limited by the collected data, studies and related literatures which are very limited. Hence, the study is also limited by the resulting data from the tools and data that will be used in the study.Methods

Research Design

This research study will use a descriptive research design to be able to gather information from the target respondents about the topic. The researchers will gather information using survey questions to explore consumer rights awareness in malls in Angeles City. Descriptive research is undertaken to describe the data and characteristics about what is being studied which in this case Consumer rights awareness in malls in Angeles City. Respondents

For this research paper, the researchers will distribute survey question sheets customers from SM Clark and Marque Mall both in Angeles, as their respondents, to answer the survey questionnaire that will be used in gathering data and information. Determination of sample size will be through snowball sampling where existing study subjects recruit future subjects from among their acquaintances. Thus the sample group appears to grow like a rolling snowball as the sample builds up; enough data is gathered to be useful for research. This sampling technique is often used in hidden populations which are difficult for researchers to access. Through these survey questionnaires, the researchers will be able to gather the data they need for this research paper.

Data Collection

To be able to know the consumer rights awareness in malls in Angeles City, the researchers will use a primary source of data gathering which is through survey. The researchers prepared a self-administered questionnaire for the respondents that will be selected randomly. These questionnaires have the same content and will be answered by respondents.

InstrumentThis research paper will use one questionnaire (refer to Appendix A) which has the same content that consist of two parts. The first part will include questions about the demographics of the respondents which will be used to measure the individual factors in the framework. The second part consists of the elements that pertain to their level of consumer rights awareness, these are : Right to basic needs, Right to safety, Right to information, Right to choose, Right to representation , Right to redress , Right to consumer education and Right to healthy environment . Data Processing and Analysis

The purpose of this research paper is to know the level of Consumer rights awareness in malls in Angeles City. Using the data that will be gathered through the survey questionnaires that the respondents will answer; the researchers will use the following statistical tools in processing the data: frequency distribution, mean rating and T-test. Frequency distribution is an arrangement of the values that one or more variables take in asample. Each entry in the table contains thefrequencyor count of the occurrences of values within a particular group or interval, and in this way, the table summarizes thedistributionof values in the sample.The mean of the ratings is calculated by finding the sum of the ratings and then dividing by the number of the respondents, it is then used as a basis for comparison for other ratings. The t-test is a statistical tool that examines the difference between the mean of the sample and the mean of the population divided by a result obtained by dividing the standard deviation of the sample by the square root of the number of individuals in the sample.

Appendix A

Holy Angel University

Angeles City

College of Business and Accountancy

SURVEY QUESTIONNAIRE FOR CONSUMER RIGHTS AWARENESS

Gender

: Female ____

Male ____

Age

: 15 to 18 years old ____

27 to 30 years old ____

19 to 22 years old ____

31 years old and above ____

23 to 26 years old ____

Occupation: _______________________________

4 Always

2 Seldom

3 - Sometimes

1 Never

Right to Basic Needs

I look at the quality of the product you are buying.1 2 3 4

I am brand-conscious.1 2 3 4

I engage in panic-buying.1 2 3 4

In times of crisis/calamity, I am vigilant in ensuring that basic commodities are available in the market.1 2 3 4

I prioritize my needs.1 2 3 4

Right to Safety

Before buying products, I would ask for a sample or a tester.1 2 3 4

Iask for a person who knows how the products work or how to operate.

1 2 3 4

I keep certain products out of reach of young children.1 2 3 4

I watch out for special warning signs in the label of the product like "NOT SUITED FOR CHILDREN BELOW FOUR(4) YEARS" or "POISON: For external use only etc." 1 2 3 4

I am on guard regarding products which are found to be hazardous.1 2 3 4

Right to Information

I read and understand all provisions in the documents especially the fine printsbefore signing any document like warranties and guarantees, credit items or services contacts.

1 2 3 4

I look for the name and address of the manufacturer just in case the need arises.1 2 3 4

I read the label of the product I am buying.1 2 3 4

I consult with friends who I know have purchased a similar product.1 2 3 4

If I need to clarify something regarding the use of the product, I don't hesitate to write the company so that I can obtain a detailed information.1 2 3 4

Right to Choose

Ispecify what Ireally want. 1 2 3 4

I canvass prices before purchasing a products or signing a contract.1 2 3 4

I read the manuals or instructions carefully to be able to compare one product with another because in this way, I will not miss the fine prints which might contain the information I need to determine which product would serve me better.1 2 3 4

If product testers are available, I am sure to try one.1 2 3 4

I am wary of special offers like free items or buy 2 take 1 free, I compare them with the regular priced items to be sure that I am not paying for the said free items.1 2 3 4

Right to RepresentationI express my interests in the making and execution of government policies. 1 2 3 4

I read newspapers, bulletin boards in private and government offices, especially in my locality for announcements of public hearings. 1 2 3 4

I am aware of how the consumer laws and regulations are being implemented in your locality. 1 2 3 4

I present my views in decision-making processes affecting me as a consumer. 1 2 3 4

I take time to attend public hearings or even meetings conducted in my area wherein consumer issues are being discussed. 1 2 3 4

Right to Redress

In case I bought a defective product, I go back to the store where I bought the item and look for the Consumer Welfare Desk. 1 2 3 4

In case I bought a defective product, Irequest a replacement, refund or if needed, have the defective item repaired. 1 2 3 4

If the manager or store representative does not act on my complaint, I proceed to the agency which has jurisdiction over my case. 1 2 3 4

I Bring the necessary documents like complaint letter and a copy of my receipt and other documents I deem are vital for the mediation. 1 2 3 4

I amsure to attend the mediation conference or any process regarding my complaint. 1 2 3 4

Right to Consumer Education

I try to acquire knowledge and skills necessary to be an informed customer.1 2 3 4

I scan newspapers, magazines and other reading materials for articles or news bits which educate consumers on how to get the best value for their peso.1 2 3 4

I involve myself in public hearings or even meetings conducted in my area wherein consumer -related issues such as access to basic goods and services, product quality and safety, sustainable consumption and the like are being discussed. 1 2 3 4

I participate in seminars, conferences and fora conducted by government agencies, consumer groups and business / industry sector regarding news and regulations for consumer welfare. 1 2 3 4

I keep knowledge and skills regarding purchase, use and effects of products. 1 2 3 4

Right to Healthy Environment

I do my share in caring for our environment by practicing the 3R's (Reduce, Reuse, and Recycle) of environmental protection?1 2 3 4

I am aware of the kind and extent of pollution occuring in my locality like air polluton, noise / odor etc.?1 2 3 4

I live and work in an environment which is neither threatening nor dangerous and which permits a life of dignity and well-being. 1 2 3 4

I have access to clean air, safe water, fertile soil, and nutritious food. 1 2 3 4

I care about my environment and my health. 1 2 3 4

Appendix BFebruary 28, 2013SM City ClarkClark Freeport Zone, Angeles City, Philippines

Dear Sir/ Madame,

We are 3rd year students of Holy Angel University taking up Bachelor of Science in Business Administration major in Legal management. Our subject, Methods of Research requires us to gather data on Consumer Rights awareness in Angeles City as a thesis requirement.

In lieu with this, may we ask your good office to allow us to conduct a survey regarding the level of consumer rights awareness using questionnaires on your customers with high hope that this study will extend service to your management. We wish to communicate the results and recommend possible courses of action to serve the needs of the said consumers.

We would be glad in complying with your requirements, policies, or processes should there be any. We would be glad to obtain your permission and conduct the survey at your most convenient and appointed time.

Sincerely,

Jan Uriel David

JocelElidEspinola

Jannie Rivera

___Mrs. Carmelita Y. Lao___

Methods of Research Adviser

February 28, 2013Marquee Mall

Angeles City, Philippines

Dear Sir/ Madame,

We are 3rd year students of Holy Angel University taking up Bachelor of Science in Business Administration major in Legal management. Our subject, Methods of Research requires us to gather data on Consumer Rights awareness in Angeles City as a thesis requirement.

In lieu with this, may we ask your good office to allow us to conduct a survey regarding the level of consumer rights awareness using questionnaires on your customers with high hope that this study will extend service to your management. We wish to communicate the results and recommend possible courses of action to serve the needs of the said consumers.

We would be glad in complying with your requirements, policies, or processes should there be any. We would be glad to obtain your permission and conduct the survey at your most convenient and appointed time.

Sincerely,

Jan Uriel David

JocelElidEspinola

Jannie Rivera

___Mrs. Carmelita Y. Lao___

Methods of Research Adviser

ReferencesBernas, J. (2001). The Intent of the 1986 Constitution WritersConsumers International. Consumer RightsRetrieved on February 28, 2013http://www.consumersinternational.org/who-we-are/consumer-rightsDe los Reyes, N. (2007). Bona Fide Text: Consumer rights awareness

Retrieved on January 12, 2013.

http://www.thenewstoday.info/2007/12/12/consumer.rights.awareness.htmlDepartment of Trade and Industry.The Eight Basic Consumer Rights.

Retrieved on January 12, 2013.

http://www.dti.gov.ph/dti/index.php?p=720Kabiling, G. (2012). 95% Of Consumer Complaints Solved Aquino

Retrieved on January 12, 2013.http://www.mb.com.ph/articles/376789/95-of-consumer-complaints-solved-aquino#.US- eN6KmhWU

Kennedy, J. (1962). Special Message to the Congress on Protecting the Consumer Interest.

Retrieved on February 28, 2013.

http://www.presidency.ucsb.edu/ws/?pid=9108Muoz-Palma et. al. (1987). 1987 Constitution of the PhilippinesOfficial Gazette of the Republic of the Philippines. (1991). Republic Act 7394Official Gazette of the Republic of the Philippines. (1930). Act 3740.

Retrieved on March 8, 2013http://www.chanrobles.com/acts/actsno3740.htmlRempillo, J. (2010). SC Upholds Consumers Rights over Meralco

Retrived on March 8, 2013

http://sc.judiciary.gov.ph/news/courtnews%20flash/2010/07/07081001.phpG.R. No. 113930.March 5, 1996G.R. No. 124461.September 25, 1998GR No. 160422,. July 5, 2010Mr. Israel MiclatMrs. Gardelina Salas Mr. Robert Quizon

The 8 Basic Consumer Rights provided by Department of Trade and Industry as the basis of consumer rights awareness:

1. Right to basic need;2. Right to safety;3. Right to information;4. Right to choose;5. Right to representation;6. Right to redress;7. Right to consumer education;8. Right to healthy environment;

Frequency Distribution

Mean Rating

T-Test

Recommendations to the consumers in order to increase or improve the level of consumer rights awareness.

Recommendations to business owners to inform them of their responsibilities to the consumers.

Recommendations to the government to be able to help them in disseminating of knowledge regarding consumer rights in order to better protect the consumers