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Aowa vs.

DTI
G.R. No. 189655, April 13, 2011
FACTS:
The DTI-NCR records show at least 273 administrative complaints against
Aowa Electronics Philippines, Inc. from the year 2001 to 2007. The facts narrated in the
consumer complaints consistently contain a common thread that a target costumer is
approached by Aowas representative usually in the mall and inform the former that
he/she has won a gift or a give-away. Aowas representatives then verbally reveal that the
said gift can only be claimed upon purchase of additional products. An initial gift is also
offered to target customer and upon acceptance, the customer is invited to Aowas store or
outlet. It is that point that the customer is informed that he/she is qualified for a raffle
draw or contest entitling him to additional gift. In the same manner, the additional gift can
be received only upon purchase of additional products. In the course of enticing the target
customer to purchase additional products, they are physically surrounded (a.k.a ganging
up) by Aowas representatives. The purchase of additional products is not disclosed during
the initial stage of the sales pitch. The revelation is done only when the customer is already
being surrounded by Aowas representatives.
As a result, DTI-NCR filed a Formal Charge against Aowa before the DTI-NCR
Adjudication Officer for violation Articles 50 and 52 of the Consumer Act of the Philippines
praying that a cease and desist order be issued and administrative fines be imposed.
The Adjudication Officer held that DTI-NCR had sufficiently established prima
facie evidence against Aowa for violation of the Consumer Act and its Implementing Rules
and Regulations. Furthermore, the Adjudication Officer highlighted that Aowa failed to
secure any Sales Promotion Permit. Thus, a Decision was made declaring Aowa liable
for Deceptive, Unfair and Unconscionable Sales act or Practices.
Aowa appealed the Adjudication Officers Decision before the Appeals Committee
(OLA). On August 26, 2008, the Appeals Committee sustained the Decision and held that the
schemes and techniques employed by Aowa were fraudulent.
Feeling aggrieved, Aowa elevated the Decision of the Appeals Committee to the
Court of Appeals (CA) under Rule 65 of the Rules of Civil Procedure. However, on June 23,
2009, the CA affirmed the findings of the Appeals Committee.
Still unsatisfied, Aowa finally elevated the case before the Supreme Court by filing a
Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure seeking the
reversal of the CA Decision. Briefly stated, Aowa raised among others the following errors
before the high tribunal:
1. There is no sufficient basis in the Formal Charge against Aowa since the
charge is merely based on consumer complaints which have all been
amicably settled.
2. The CA erred when it affirmed the harsh and excessive Decision of DTI
notwithstanding the fact that the Formal Charge is not supported by any
concrete, sufficient and convincing evidence.
3. The complaints against Aowa pertain to cases in the NCR, hence, there
was no basis for DTI to presume that the allege offenses are likewise
practice in other places in the country.
4. Aowa also argued that like other companies, sales personnel employed
enthusiasm and overzealousness in sales talk to convince potential
customers which cannot and should not be considered as deceit.
ISSUE:
Whether or not the CA committed any reversible error in affirming the findings and ruling
of the Adjudication Officer and the DTI Appeals Committee.
HELD:
In sustaining the CA Decision, the Supreme Court held that it is indubitable that the
DTI is tasked to protect the consumers against deceptive, unfair and unconscionable sales,
acts or practices as defined in Article 50 and 52 of the Consumer Act. It cannot be gainsaid
that the DTI acted on the basis of about 273 consumer complaints against Aowa, averring a
common and viral scheme in carrying out its business to the prejudice of comsumers.
Complaints- filed by consumers not only within NCR but also in the provinces- continued to be
filed even after the formal charge and the issuance of PMO.
In giving due respect to factual findings of DTI, the Supreme Court held: By reason of the
special knowledge and expertise of DTI over matters falling under its jurisdiction, it is in
better position to pass judgment on the issues, and its findings of fact in that regard, especially
when confirmed by the CA, are generally accorded with respect, if not finality, by this Court.
Furthermore, Aowa failed to refute DTIs finding that it did not secure any permit for its
alleged promotional sale.
In these trying times when fly-by-night establishments and syndicates proliferate all over the
country, lurking and waiting to prey on innocent consumers , and ganging up on them like a
pack of wolves with their sugar-coated sales talk false fellester.blogspot.com representations
disguised as overzealous marketing strategies, it is the mandated duty of the government,
through its various agencies like the DTI, to be wary and ready to protect each and every
consumer. To allow or to even tolerate the marketing schemes such as these, under the pretext
of promotional sales in contravention of the law and its existing rules and regulations, would
result in consumers being robbed in broad daylight of their hard earned money. This Court
shall not countenance theses pernicious acts at the expense of the consumers.