Since it is so close to Christmas I figured this was a very good time to bring a couple things to the attention of those thinking about moving to the Philippines, dreaming about moving to the Philippines or just remotely interested in the idea … which covers a lot of people who will be reading these words.
I’m an American, so remember that I really can only write with any authority about conditions here in the Philippines or how they were back in the USA, lo those many years ago when I lived there.
Consumer protection and Consumer Rights are a big, big thing in the US. Even though many US businesses persist in hiring poorly trained or disinterested employees (who often cause the very complaints they have to deal with), in a vast majority of cases the American consumer gets what she or he wants.
In many cases it’s granted by law. In the Philippines, even in stores and businesses which look the same as their US counterparts, consumer rights are likely no where near the same. A few examples:
Credit cards: Fraud protection: In spite of many people’s irrational fear about losing their credit cards, US issued credit cards can not cost the consumer more than a total of $50 USD, by Federal law.
In most cases, credit card issuers waive even that. The law provides this protection regardless of notifying the bank to cancel the card. You are pretty safe, no matter what happens to your card. Philippine-issued credit cards have no such protection. You are liable up to the credit limit on the card if the card gets stolen or fraudulently used, up until you can notify the bank and the bank confirms notification. Does that give you an idea about why I don’t recommend carrying any Philippine-issued cards?
Fees: In the US it’s typically illegal to charge two prices for an item, cash or credit. Some states have laws like that on their books, and the major credit card carriers, like Visa, have that written into their merchant agreements. Now in reality, this means you do pay a fee for the use of a card, even when you don’t use one. The merchant just makes sure the costs of credit card fees (they can be substantial) are included in the price and you almost never pay an extra fee for using a card instead of cash.
Even though the Philippines passed a similar law last year, it doesn’t seem to be widely implemented. Although many businesses here don’t take cards, be prepared to be charged 5 to 15% if choose to use one at a business which accept. Complain to the Consumer Protection Agency about such a practice? Good luck, there isn’t one.
Returns: In the US it’s almost universal that if you buy something at a store and you decide you don’t like it after you take delivery, you can return it … often no questions asked. At the worst you might be asked to pay a 10 or 15% restocking fee, but you are almost never stuck with an item. Even a car, in most states, can be returned if it proves to be a lemon.
In the Philippines returns are almost unheard of. Make sure you want something before you hand over the cash, because it’s yours. Period. Larger stores, especially ones who are franchised by US firms, like Ace Hardware, may issue you a credit slip … but returning even an unused item for a refund? Nearly unheard of.
Signing up for Internet service? Easy … the installer might be out the same or next day. Don’t like the service? Too bad because you signed an agreement for 12 to 14 months of service and you have it, like it or not.
This is an issue a great many Westerners are going to have a problem with … it’s a near universal practice and it will be annoying and expensive to get used to … I’ve certainly paid my tuition.
Bank Issues: If you write a check on a US bank there will be no place to cash it here. Virtually impossible. If you deposit it in your own Philippine US dollar account it will clear … the money will move from your US account to the credit of the Philippine bank in a few days … less than a week usually. But almost universally the Philippine bank is going to hold that money for 40 more days before it becomes available. Period. Why? Because they can. They are the bank and you are the consumer and consumers, in general have no rights.
ATM no dispense: This is a big issue if you use your ATM card much. You insert the card, type in your PIN, request a withdrawal and the machine refuses to ‘give’. If you’re lucky it spits your card back at you, if it ‘eats’ your card you’re stuck with a visit to the bank to make a report. But even more annoying … the amount you tried to withdraw is likely gone from your account. Talk about an annoyance. After you report this to your bank, if you’re lucky, the missing money will be put pack in your account in 5 to 8 “banking days” … which may well turn out to be 10 or more calendar days.
Lesson one: Don’t depend on getting cash every time you try your card. Lesson two. Don’t try it more than once, each try may be another ‘no dispense’ withdrawal. Lesson three … keep cash on hand.
Things can go sour in a heartbeat and the bank will take its own sweet time in correcting things.
Phony Claims: This one would be laughable, if so many poor people who can ill afford the loss weren’t being duped, day after day. Want a drug that will make you as smart as Einstein in a week or two … you can buy it. Want to see “proof” that overpriced chicken bullion can make your brain work like a Rhodes Scholar? It’s on TV all the time. Think buying a specific brand of baby formula will get your child a scholarship in 20 years? Claims nearly this outlandish are made all the times on TV and in the newspapers.
Do you mean to tell me there are no laws against such blatant hucksterism? There are laws. And basically they say such claims must be disclaimed. You watch that ‘chicken bullion’ commercial long enough and you’ll see a tiny flash of black with some letters on it. You’ll never be able to read it on the TV screen, but the same disclaimer is on the company’s print ads … “No Therapeutic Claims”.
In other words, I said something, but I didn’t mean it because I weasel worded it at the end. It’s really a sad way of doing business and it hurts the image of the country almost as bad as it hurts the people who are duped into buying things being hawked by initiation doctors, dentists and such making ridiculous claims which are then ‘taken away’ by a barely readable disclaimer which negates the whole ad.
Anyway, the comment line is open, what else do you want to know about planning to live here in the Philippines?
Thanks for the information Dave!
I have used BDO machines since coming here from Australia; on the weekends they often run 'dry'. I have found Mondays to Fridays there is generally no such problem. BDO gives me a balance in Pesos on the transaction slip and I have never had failed transactions processed to my account (touch wood).
On the advertising issue, I agree 100%; I have just written a piece for LIP on the subject of womens product advertising.(I hope it's not libelous so Bob can publish it). I'm not sure about the States but in Australia there has been a slippage in advertising standards over the last few years as TV struggles to compete with the internet.
Hi Dave,
This story and your last two stories on Philippine laws has been a real eye-opener for me. It shows that you can't just assume things are the same as they are back in North America.
You are doing a great job in helping future ex-pats to the Philippines watch out for the kinds of problems they may face there.
I enjoy all your stories very much!
Hello Dave,
How are things back in Marilao? Didn't get a chance to meet up with you while I was there. We will be back in Luzon between Christmas and New Years. Hope we have an opportunity to get together then. Did you ever find the hotel I mentioned?
I have had a couple instances (since moving to RP in 03) where my bank account was double charged for an ATM withdrawal. However, it appears to have been on my US banking side. The bank has caught it and repaid the funds (even before I was aware of the situation most of the time).
Let us not forget (as this has happened to several people), they have apparently figured out a way to copy the information on your cards and withdraw all the funds from your account within a short time. I have heard they have some type of reader that can be placed on the card reader slot. A coworker of mine fell victim to this and had his entire bank account emptied before he discovered it. The "word on the street" is to examine the ATM card slot for any foreign objects before use.
Hi Dave,
Thanks for the "heads-up" on these practices in the Philippines. While visiting Davao back in April, I made frequent use of various ATMs and never had a problem. The machine dispensed cash promptly and only once did I have to re-enter my PIN. Luckily in checking my account later, I wasn't double hit for that action. Keep up the good work! 🙂
Hi Dave,
Just so people know, one can file a complaint to the DTI if you come across any businesses that charge you extra for credit card purchases. Every DTI office has one officer in charge of handling these complaints.
Hi Chris- Yep, your article is scheduled to publish in a couple of days. Keep an eye out!
@ Chris: thnaks for commenting. May your cash always dispense. I just used the ATM this morning for a healthy sum … hey, it is Christmas and all is well … but I just wanted to point out the difference when things do go wrong. Banks almost never make "on the spot" transactions, even when it's their error. Just something you have to factor in is all.
No never had a problem with ATM's here,
only with workers.
@ Randal … thnaks for visiting and for the kind words. I'm concerned that I sund too negative sometimes … I like living here, I really d, but as you say it's important to know that there are some big differences. I have one more article in th ehopper that might be a bit 'precautionary' and then I promise to turn 100% positive on the place, really 😉
You kbnow my wife and I were just going over our bank accounts and making some plans for a couple thibngs we plan to do next year and I couldn't help shaking my head and wondering why in the world it took me so long to make the move … 'different' laws not withstanding this has been a great retirement haven for me, for sure.
@ martin; Hi and thnaks for that tip … I wonder where the closest DTI office is, I'll familiarize myself with that. Have you any actual expereince with filing a claim?
Hi Dave,
Every province has a Provincial DTI Office, and there is also a Regional DTI Office that is in charge of, you guessed it, regional and inter-provincial projects related to trade and industry. So, depending on where you live you may have one or both DTI offices in the major city of the province in which you live.
I used to do consulting work for DTI and have many friends working there, so for me it is easy to pass on any feedback I may have. But anyone can just walk in to a DTI office and file a report pretty easily. I can't remember what month it is, but there is even a consumer welfare month, where DTI does information sessions to disseminate information and remind retailers what penalties they can face if complaints are made and transgressions are verified.
Ultimately, it is only through bringing complaints to DTI that businesses can really be forced to abide by rules designed to protect consumers. Good businesses will do things to make it easy for customers within reason. Less scrupulous businesses require a 'stick' as opposed to a 'carrot'.
I discovered a problem with my ATM card last night. I withdrew the max I could on two transactions. Using my American card. The bank took out three transactions. There went my Christmas funds! Call my bank and they TOLD me it will be back within 24 to 48 hours. Been less than 24 hours but I don't have it yet.
I think I'll be okay, since it's an American card. I hope so. I have to stop using that method though. They have added some new fees. The bank here started charging me $5.00. There is a Visa fee of $4.10 on P10,000 and my bank charges me another $2.00 per transaction since it is not one of their ATM machines. I wont be using my ATM card any more. Its fast and easy but the $13.00 is a lot of money in the Philippines, well I can go out to eat on it three times.
As for customer service and protection. There is zero. If you go to a restaurant and order something and they foul it up so badly that you can't eat it. Such as putting onions on a pizza, you still have to pay for it I felt like a fool when I paid for it but I didn't want to risk having any kind of legal problems. After checking around with both expats and Filipino, that's really your only choice. Pay. Of course I don't go back even though I want too. Its the only pizza in town that includes an air-conditioned place to eat. The only other place to go closes about 6pm.
DAVE, DTI sounds great, I wonder if they can give me help with my pizza. LOL 🙂
Here is the DTI website:
http://www.dticebu.net.ph/
Hi Dave Been a couple of these situations myself Jess would tell me about them when we were shopping ..( window shopping ) …at the mall …… Don't use credit cards the shops don't like them ..watch which atm u use steal your money ?..and there is a few for everything you do in the Philippines ..and no returns ..WoW what a place ..hey u got to go with the flow …Phil R.
Dave – very informative article, as usual.
I'm not so sure advertising isn't getting just as bad here in the States. Seems I remember a "truth in advertising" law when I was younger. That obviously is longer in effect.
Rusty – I agree about not wanting any legal problems.
Anyone know any banks that have no or low withdrawal international atm fees?
From my readings of other P.I. forums, I believe China Bank only has a 2-week hold on foreign written checks. Yes, many P.I. banks have a 30-day hold on these checks.
I'm paying $5AUD per transaction up to PHP20,000 Banco De Oro.BUT the exchange is 2P short on the current exchange.
Hi Dave,
I thought Marie was overcautious at first when we purchased a coffee maker and she insisted that they plug it in and try it out at the store. I then learned that the exchange or return policy is very strict. When I was doing a project at home I had a few extra pieces of hardware left so I returned them but was made to take store credit. I routinely buy extra hardware during a project to cover my blunders or poor planning but now I will have to just be more careful or end up with a hardware inventory. I worked in marketing for a while and I always thought that the American return policy was too liberal. I have seen people returning damaged and worn out goods without question from the merchant.
When we return to the Philippines for good next year we thought we might establish a dollar account in our bank in addition to the peso account we already have. Would this help to prevent the exchange rate cheating that Chris and ourselves have experienced. One time our bank held our transfer for an extra eight days until the exchange rate went down. They claimed the account numbers were wrong so it was held up. I knew they were lying because I had the original document.
Just want to add that I love your site Dave. You give priceless info for a military retiree like me for when I am finally free to move there.
@ Mike K … Give me a text on 0919-231-5625 if you are nearby and we'll do lunch or something. I could make up a good excuse but it would be a klie, I totally space dout on that hotel you mentioned, please jog my memeory again at my email: dave(at)philfaqs(dot)com will work.
Especially with trans-Pacific communication involved 'non dispenses' are not uncommon. What is uncommon is the difference between the US bank's response and the Philippine banks response. It's a sin, really.
There are also phony ATM machine schemes to beware of. That's why I consistently tell people, do not have _any_ card tied to your primary bank account .. this goes for the US as well. My son inColorado lost more thna $10,000 via fraudulebnt ATM use. In fcat he lost more thna he had in the bank becuase he had overdraft protection on his account and the bank kept processing the withdrawls even when the abccount was below zero … for a price, of course.
Have a separate account for your day-to-day ATM use and do not even _have_ an ATM card that can access your main account. Too much hassle? OK fine, perhaps it will never happen to you.
@ Henry: Thanks for the report. Everything's better in Davao 😉 Again the point of the article is not about 'if' it will happen … becuase it will, sooner or later, it is about the differences in bank operations you need to be prepared for.
I use my Philippine ATM card often, I use my US-based one every couple months to keep it active … but speaking from day-to-day expereince, do notlet yourself run fdown to the last peso and then go to the ATM … that 'critical need detector' idea is more than a joke … they will let you down at the most inopportne meoent, so so I have found.
@ Rusty: thanks for sharing your story. Many people ask me "why can't I just live on my US ATM card, why do I need a Philippine bank"?
the answer is, you _can_ live on your US ATM card, but I am a belt and suspenders man, I beleive in having my money and my income going to at least two different banks, and if the banks are on two continents, so much the better. It's not a hard and fast rule either way, it's totally personal preference.
I laughed about the restaurant deal, sorry. Believe me I was laughing with you, not at you. To my mind the only civilized country I ever lived in regarding that issue was England. If unsatisfied with a meal you need only say so and sign the tab with your name and address … assumedly so the restaurant could claim the loss on their taxes. Don't know if the law still works thta way there, but here in the Philippines, for sure, every meal is a gamble. Pizza is an especially risky choice.
@ Phil R: Indeed. Going with the flow is necessary. That's why I so often sound like a broken record, I guess, when I warn people that making a decison based on the cost of living here is poor thinking. You have to be able to change in a lot of ways not related to price alone … to be happy here you have to adapt to the Philippines, the Philippines is surely not going to adapt to you 😉
@ Randy C: Well, perhaps that is so. One of the grat advantages to living here full time is I never see a US TV commercial and very few print ads.
@ Ed griffin: There are a number of US banks who claim to have no ATM fees. I don't recommend any of them publiclly any longer becuase it always seems to descend into an arguement every time I do. Google is your friend.
But actually there is no way _not_ to pay a fee in some manner. First of all the only way a card can work over here is to be tied to an international network like Visa or Mastercard. Those networks charge a fee for 'crossing borders'. Perhaps a certain bank will 'eat ' that fee'. Most won't.
Second, the term currency exchange is actully inaccurate. No place 'exchanges' currency. It's a market transaction. You have dollars, you want pesos you are really instructing the network to 'sell' your dollars to 'buy' a certian number of pesos.
On any given day here you can go to any city and find dozens of different 'exchange rates'. The networks set the exchange rate for their transactions. Currency trading is a free market. Typically that rate will be less than you could get by selling the dollars here, so that becomes a 'fee' to you, regardless of what your bank statement says.
Hi Dave!
We are planning to relocate from the US to our home near Gen-San in May or June. We have an peso account at major bank but I was thinking about starting a dollar account. They told me that the fee for cashing a check from the US is $4. I have done money transfers from bank to bank and the cost is $40 plus whatever fees are added and the amount they steal during the currency exchange. I feel like we lost over 1200p during my last transfer. I was thinking that if I write a check to my dollar account from a US bank my cost will be $4 then I can sell my dollars when the rates are favorable. Is there something that I am overlooking with this strategy? We do plan to have accounts in multiple banks just for safety but we will probably keep our savings in the US since the deposit insurance is quite low in PI.
For the year I lived in Davao I had no problems with getting money out of ATMs. I used the trick Bob mentioned a few times to check my balance first then withdraw. So far it worked for me. I used BPI over 90% of the time and probably averaged 3 withdrawal sessions a month. They only let you take out 5k at a time and 20k total so I usually had 2-4 transactions each time.
However after getting back to the US I tried to send money to my wife with a bank wire to her BPI account. After waiting a month and many calls I finally told my bank to try to retrieve the money. Still haven't got the money back and its been a bout 6 weeks. BPI admitted they had it but claimed they needed her account number then needed the routing number which was all sent with the wire.
I was seriously considering opening an account with them to receive my SSI direct deposits but after this fiasco I will continue to use a US bank. You would think they could see these practices are costing them money.
I use a debit card on my main checking account but it never has more than a months pay in it and I call the bank if I need to transfer from savings. That is a hassle as the hours are so different but it worked for me.
@ John H … Agree. I don't want my direct deposits coming to the Philippines, a. becuase of the delay and leck of customer service and b., beucae if I never needed to be somewhere else, how long would it take to shut down my 'system' and get all my money going to another country if I were alreadyout of the Philippines.
BDO and BPI aretwo banks I know of that do not charge a fee for a US dollar check. I use both of them … always food to have a bank in reserve. Deposit my own checkdrawn on the US bank once a month for free and ny next month the money is in my Philippine dollar account. I draw from that accunt during the month as needed.
If your US bank can transfer by phone don't thye have a website? My US credit union has 14-7 phone service and web account management, transfer in seconds. B
Anyway, that's how it goes
My bank does have internet banking available but since I'm not that computer savvy I worry I might get some mining virus that will retrieve my info. Maybe I'm just being paranoid.
I do want to keep closer tabs on my money though so thinking of setting up my checking account so I can access it online. Still wont trust the savings with it though 😉 But then again I may bring most of that with me next time the way the dollar looks I want to get it into real property soon.
This was a very informamational article Dave. Glad I didn't read it before the first time I was there. hehe I mean about the return policy.I needed a scan disk for my camera so Josey and I just went to the mail to get one. Battery was dead in my camera and the store did not have the one I had in my camera. but assured me that what he had would work and was much better. He did say if it does not just bring it back. It did not and when I returned, with a smile I was offered to exchange for something else. They had nothing I wanted and agrued this politely while Josey was telling me to just pick something. Dumb American did not but in the end they did refund my money. LUCKY Next time I will remember where I am because I am going to live there.
hello dave, i have a qiuestion regarding credit card debt.. i used to work in dubai and i have some credit card debt and loan there. Now the credit card company and collection agent is threatening me that they will file a case and send me to jail if i don't pay them. I am willing to pay them but I can't afford to pay the whole amount. I do't want to give them my conact ifo and where I work now here in the phils. because i know they will harrass me. What should I do because they are calling my family members all the time. Please give me some answers and advise. Thanks!