DTI seeks advertising industry support vs fraudulent online ads

The Department of Trade and Industry (DTI) has sought for further collaboration with the advertising industry to tighten controls against fraudulent advertising, by including online marketing, amid increases in consumer complaints, primarily emanating from internet-based transactions.

In a speech Friday, March 31 at the AD Standards Council (ASC) Induction of 2023 ASC Officers and Board of Directors, marking its 15th anniversary, Trade and Industry Secretary Alfredo E. Pascual reported that DTI’s Consumer Protection Group (CPG), which handles consumer welfare, has monitored a surge in consumer complaints from online transactions.

He reported of over 57,000 consumer complaints during the first year of the pandemic in 2020 from just over 10,000 in 2019.  The number of complaints went down to 31,372 in 2021 and further reduced to 27,947 in 2022.

While the number of complaints declined, Pascual noted that close to half (44% or 12,200) of the 27,947 complaints in 2022 that the Fair Trade Enforcement Bureau received involved online transactions.

The most common complaints among the 12,200 were liability for product and service imperfection. These complaints include over 2,500 deceptive, unfair or unconscionable sales act or practices like receiving torn clothing. There were also almost 2,200 complains for not receiving any item order at all even after payment, and 450 on no discounts during an advertised sales promo.

Of the 12,170 complaints, Pascual said, almost 2,500 were resolved, a little of 9,900 were endorsed to the appropriate agencies, and the rest were either withdrawn or issued Certificates to File.

Pascual then turn to the advertising industry for help stressing that more than its regulatory and penalizing provisions to protect the safety and welfare of consumers, the Consumer Act of 1992 seeks to create a positive consumer environment where rights to safe products and services, fair transactions, and redress are fully exercised.

“This is where advertising comes in, as it is also a vehicle of culture, creating public mood,” he said the advertising professionals noting that advertising can help create and foster that safe and fair consumer environment. “ASC colleagues, your industry is the face of the Philippines to the world through the content you help create,” he told them.

Pascual cited previous collaborations between DTI and the ASC, which he attributed to the 25 percent drop in the number of complaints on misleading advertisements and fraudulent sales promotion practices nationwide. The number of complaints fell from 1,166 in 2021 to 873 in 2022.

Hence, in this new normal, Pascual asked the ASC for three things: Include online advertisements in the pre- and post-screening of advertising; help push for the enactment of the Internet Transactions Act (ITA); and  support via discounts or other concessions for ads of players with Trustmark.

Pascual explained that at the heart of the highly anticipated ITA bill are mechanisms such as the Online Business Registry (OBR) and the eCommerce Philippine Trustmark.

Thus, the DTI’s Digital E-Commerce Division is drafting a Department Administrative Order with guidelines to establish the e-commerce Trustmark while the ITA bill is still pending in Congress.

“Given the number of fraud online, it doesn’t come as a surprise that consumers base their purchasing decisions on how much they trust the e-commerce system in general and the online merchant in particular,” he pointed out.

He concluded that trust, or more precisely lack of trust, is still the biggest barrier to the industry's realizing the full potential of e-commerce.
This is where the safeguards, which the Philippines adopted from the ASEAN Committee on Consumer Protection, will benefit merchants and consumers who transact online.

This means, online platforms and sellers that uphold the rights of consumers and practice responsible business will get this badge of trust. To support this advocacy, Pascual urged advertising firms to also give discounts or other concessions for ads of players with Trustmark.
He further noted that at the celebration of World Consumer Rights Day last March 15, ASC and the Out-ofHome Advertising Association of the Philippines joined DTI in launching our Consumer Care Advocacy Initiative (CCAI) Project.

In this project, organizations providing land, air, and water transportation to the general public allowed the use of their available platforms for consumer education. Pascual urged other members to allow the use of their media sharing platforms for DTI to disseminate its consumer information materials to help educate more consumers on their rights and responsibilities.

Pascual expressed hope that the level of consumer consciousness would surpass the current awareness level of 82 percent.
In fact, Pascual attributed the reduction in fraudulent advertising following the renewal in 2021 of the DTI-ASC through a memorandum of understanding against unlawful advertising contained in Chapter VI of the Consumer Act of 1992. Unlawful advertising means disseminating false, deceptive, or misleading information via Philippine mail or mass media in print, radio, television, and now the Internet.
Under this MOU, the Council continues to protect consumers by pre- and post-screening ad material content for compliance with the law and the Council’s own Code of Standards and Ethics.