Strengthening Online Compliance: Can the New Internet Transactions Act End Colorum Practice?

“Risk comes from not knowing what you’re doing.”

– Warren Buffet, American Business Magnate, Investor and Philanthropist

By Realttorney^®

In the Philippines, as with many other countries, the proliferation of online platforms has both facilitated legitimate real estate transactions and has provided avenues for fraudulent activities as well.

---

Early last month, President Marcos, Jr. signed into law 2 of his priority bills he first mentioned during his first State of the Nation Address in July 2022. The first is Republic Act No. 11966 otherwise known as the Public-Private Partnership (PPP) Code of the Philippines.

The second one is the focus of this article, which is Republic Act No. 11967, also known as the Internet Transactions Act of 2023. This piece of legislation aims to protect online consumers and merchants engaged in Internet transactions. It was enacted on December 5, 2023, and became effective 15 days after its publication in the Official Gazette according to Section 38 of Rep. Act No. 11967.

What are the key provisions of the relatively new Republic Act?

First, is the Establishment of the Electronic Commerce Bureau (ECB). The ECB is a new government agency tasked with implementing and enforcing the provisions of the Act. It has the power to investigate and resolve complaints, issue cease and desist orders, and impose fines on violators.

Second, the Protection of Online Consumers. The law strengthens the protection of Filipino online consumers by (a) requiring online merchants to provide clear and accurate information about their products and services, including prices, payment terms, delivery schedules, and return policies; (b) prohibiting any misleading or deceptive advertising practices; (c) mandating that online merchants have a privacy policy in place that outlines how they collect, use, and protect consumer data; (d) giving consumers the right to cancel orders within seven days of purchase, with some exceptions; and (e) establishing a mechanism for consumers to file complaints and seek redress for any violations of their rights.

Now, can real estate buyers who engage colorum practitioners be protected by this provision? In my opinion, the resounding answer is YES. It must be emphasized that the Internet Transactions Act of 2023 requires online merchants (colorum practitioners) to clear and accurate information about their products (house and lot, farm lots, condominium units, etc.) including price and payment terms.

What clear and accurate information needs to be included in the social media posts of the colorum practitioners, apart from the details of the real properties, their prices, and their terms?

1. Full name and designation;
2. The PRC License Number or PRC Accreditation Number of a real estate salesperson;
3. Validity of the license or accreditation number;
4. The PRC Identification Card Number;
5. The Current Professional Tax Receipt Number;
6. The AIPO Number, if available; and
7. The date of issuance of the PTR Number and the AIPO Official Receipt for the current year.

But, if you are a project-seller then aside from the 7 information, the colorum practitioner should indicate each item in his social media posts:

1. DHSUD Registration Number and date of issuance;
2. Office Address;
3. Contact Information and Email Address;
4. Name of Project;
5. Location of the Project
6. Project Classification: PD 957 or BP 220
7. State max. selling price if under BP 220
8. Project Type: Subd/Condo/Memorial Park
9. Name of Owner/Developer;
10. License To Sell No.?
11. Completion Date?

These details are all required by HLURB Board Resolution No. 921, Series of 2014, in conjunction with Rep. Act No. 9646.

Third, the Protection of Online Merchants. These are the new law that protects online merchants: (a) Prohibits unauthorized access to or use of electronic data and systems; (b) Provides for the protection of intellectual property rights in the online environment; (c) Establishes a dispute resolution mechanism for resolving conflicts between consumers and merchants.

Fourth and final, Regulates online advertising and marketing practices. This is equally important as the provisions that protect online users discussed above: (a) Prohibit the sale of counterfeit goods online; (b) Require online platforms to take down illegal content upon notice; and (3) Encourage the development of self-regulatory mechanisms by the e-commerce industry.

How can the real estate buyers be protected using these provisions of the law? The PRBRES in coordination with the PRC should now make representation with the Department of Trade and Industry to inform Facebook, YouTube, and other social media platforms to take down illegal content upon discovery of the lack of the mandated information listed in Section 38 of RA 9646 and HLURB Board Resolution No. 921, Series of 2014 in the posts of colorums as part of their marketing efforts using the internet.

Rep. Act No. 11967 is a significant step towards building a more robust and trustworthy e-commerce environment in the Philippines. It is expected to promote consumer confidence, encourage more businesses to operate online and contribute to the growth of the digital economy. Hence, we can use the provisions of this new law to curb, if not totally stop the colorum practice in our midst.

I call upon all licensed real estate brokers and accredited real estate salespersons to unite and make our voices heard by Facebook and other social media platforms, through the DTI, and ECB to stop once and for all the illegal practice of all colorum practitioners.

What do you think? Do you share my views on the application of Rep. Act No 11967? Let me know in the comments section and let us start a conversation.

——-

Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector