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PIA Press Release
2007/09/12

DTI bans extra charges on credit card sales

By Rose B. Palacio

Davao City (12 September) -- The Department of Trade and Industry (DTI) has ordered that there shall be a ban on surcharges on retail transactions using credit cards, debit cards and automated teller machine cards.

Trade Secretary Peter B. Favila said the new policy was part of a campaign to protect consumers from unfair trade practices.

He said Department Administrative Order No. 10 series of 2006 would protect consumers from dubious price tag practices by giving more teeth to Republic Act 7394 otherwise known as the Consumer Act of the Philippines.

DAO 10 prohibits any surcharge, extra charge or additional charge over and above the price tag on items purchased using cards for payment.

Favilla said that a number of retailers have been charging differently on specific items depending on the client's mode of payment.

"Usually, purchases using credit card are priced higher than those paid with cash, and this discriminates against cardholders," he said.

He explained that under DAO 10, all modes of payment available to consumers must always comply with Republic Act 71, or the Price Tag Law.

"When the consumer opts to pay either cash or card, he she should pay only what is stated on the price tag. There should only be a single price tag indicating the cost of each item," he said.

He said DTI order also requires that the option to pay cash, card or installment be disclosed to the consumer, if the information is not indicated in the price tag.

The price tag should be inclusive of the value-added tax for items covered by the VAT. DAO 10 specifies the proper format of an official receipt. It says the price opposite each item should already incorporate the amount of tax to be paid. The total cost that the consumer should pay is stated and the sum of the tax is shown as a separate item in the receipt. "It is unlawful to charge an additional tax over the price tag," Favilla said. (DTI/PIA) [top]

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