“Ganging-up” on customers is illegal
Sales is the lifeblood of any business. A company that is just starting to sell its products and services invests heavily in marketing activities to generate sales that will give the investors a reasonable return of their investment. Marketing professionals can testify on how the company exerts extreme pressure on them to achieve their sales quota.
Companies, however, do not have the absolute freedom to market their products and services using any scheme designed to generate maximum sales. Just like all other freedoms, the privilege to sell products and services are subject to reasonable regulations.
In Aowa Electronics v. DTI (2011), the Supreme Court ruled that “ganging-up” on customers is illegal. Through sales representatives operating in malls and supermarkets, Aowa entices target customers by saying they are entitled to free gifts and giveaways, which upon acceptance, they would invite them to an outlet where they would draw on a raffle or contest where they would win another price which they can claim only if they buy products which are priced substantially high. In the course of enticing target customers to purchase additional products, they are physically surrounded by Aowa’s representatives, otherwise known to many as “ganging-up” on customers.
The Court declared Aowa’s practices violate the Consumer Code Act. Arts. 2 and 48 of the Consumer Protection Act clearly set forth the policy of the State on consumer protection, and that Art. 159 thereof can be construed as granting the DTI the power to file formal charges in order to effectuate the State policy to protect consumers against deceptive, unfair, and unconscionable sales, acts, or practices as defined in Arts. 50 and 52 of the Act. (Reference: Commercial Law Review by Dean Cesar L. Villanueva and Gabriel S. Villanueva)