If passed, this could turn the Lemon Law in the consumer's favor

With the 2022 Philippine general elections less than a year away, it's not surprising to find a lot of new bills that are being filed or pushed forth in the upper house (Senate of the Philippines) or the lower house (House of Representatives).

One that was recently filed caught our eye: Senate Bill 2356 (which substitutes Senate Bill 2064) by Senator Koko Pimentel III. The reason is that he wants to make some major amendments to Republic Act 10642: the Philippine Lemon Law.

The seven-year-old Lemon Law is a very important one for car buyers to read up on because it outlines specific consumer rights if there are problems (referred to as nonconformities) after buying a brand new vehicle from a reputable automobile company (distributor/dealer/retailer). In short, if after four tries at fixing the same problem and the car is still exhibiting the same problem, then the customer will be entitled to either a replacement vehicle or a buyback plus collateral damages.

On August 23, Sen. Pimentel filed a bill that seeks to make several critical amendments to that law.

The first one is perhaps the most striking: the bill wants to reduce the individual repair attempts before a consumer can avail of his/her rights under the law. In RA 10642, the number of repair attempts for the same issue/nonconformity is four. In SB 2356, that is to be cut down to just two.

Senate Bill wants major revisions to Philippine Lemon Law image

The important thing here to remember is that the problem (nonconformity) has to be exactly the same. For instance, if the A/C compressor keeps failing after four attempts by the distributor/dealer/retailer to fix, rectify or replace it, then the consumer can avail of their rights. So reducing that to just two attempts is very significant.

Another major amendment being sought is the duty of the distributor/dealer/retailer. Under SB 2356, the law is to be amended to say that the car company has 14 days to provide parts or components. If they cannot, the consumer can file a complaint with the Department of Trade and Industry and avail of their rights. Mind you, that means calendar days (at least by our understanding) and not business days.

The bill also increases the time frame after the final repair attempt in favor of the consumer. Under the current form of the law, the consumer has 30 days to file a complaint if the vehicle still manifests the same problem. In SB 2356, the number of days has been doubled to 60. That gives the consumer more time to evaluate should the issue manifests again or not.

The bill also somewhat streamlines and simplifies some of the terminology and legalese, and appears to place more responsibility on the distributor/dealer/retailer. If the vehicle is being repaired for the issue, the distributor/dealer/retailer has the option to provide the consumer with compensation for taxi fares or a service vehicle (e.g. loaner car).

The key here is that the car company has that discretion, but the bill seeks to turn that around and give the option to the consumer. If they don't come to an agreement, the consumer can file a complaint with the DTI. And the liability for the distributor/dealer/retailer under SB 2356 for failing to provide that is PHP 50,000.

The other proposed amendment is to the conditions for granting of the consumer's rights (suitable replacement or buyback + collateral damages). The nonconformity isn't the sole condition anymore; the 14 day limit for parts is also planned to be grounds for replacement/buyback.

It will be interesting to see how the Philippine automobile industry will respond to these proposed amendments. As consumers, feel free to chime in if you agree or disagree with the proposed revisions to the Philippine Lemon Law.