Govt issues guidelines for misleading ads; to impose up to Rs 50 lakh fine for violation

In order to curb misleading advertisements and protect the consumers, the Central Consumer Protection Authority (CCPA) under the Department of Consumer Affairs, on Friday notified 'Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022'

Penalties for violating the guidelines have been clearly outlined. CCPA can impose a penalty of up to Rs 10 lakh on manufacturers, advertisers and endorsers for any misleading advertisements. For subsequent contraventions, CCPA may impose a penalty of up to Rs 50 lakh 

The CCPA can prohibit the endorser of a misleading advertisement from making any endorsement for up to 1 year and for subsequent contravention, prohibition can extend up to 3 years.

These guidelines seek to ensure that consumers are not being fooled by unsubstantiated claims, exaggerated promises, misinformation and false claims, explained the Consumer Affairs Ministry in an official statement.

It added that such advertisements violate various rights of consumers such as the right to be informed, the right to choose and the right to be safeguarded against potentially unsafe products and services.

The present guidelines define "bait advertisement" and "surrogate advertisement" and clearly provide what constitutes as "free claim advertisements". Misleading advertisement has already been defined under section 2(28) of the Consumer Protection Act, 2019.

The guidelines forbid advertisements from exaggerating the features of a product or service in such a manner as to lead children to have unrealistic expectations of such product or service and claim any health or nutritional claims or benefits without being adequately and scientifically substantiated by a recognised body, explained the ministry. 

Guidelines say that advertisement targeting children shall not feature any personalities from the field of sports, music or cinema for products that under any law requires a health warning for such advertisement or cannot be purchased by children.

The ministry further added that disclaimers in advertisements play a pivotal role from consumer perspective since in a way it limits the responsibility of the company. 

"Therefore, guidelines stipulate that disclaimer shall not attempt to hide material information with respect to any claim made in such advertisement, the omission or absence of which is likely to make the advertisement deceptive or conceal its commercial intent and shall not attempt to correct a misleading claim made in an advertisement," noted the ministry. 

It added that the disclaimer shall be in the same language as the claim made in the advertisement and the font used in a disclaimer shall be the same as that used in the claim.

Clear guidelines have been laid for duties of manufacturer, service provider, advertiser and advertising agency, due diligence to be carried out before endorsing and others.

The guidelines aim to protect consumers' interests by bringing in more transparency and clarity in the way advertisements are being published, so that, consumers are able to make informed decisions based, the ministry explained. 

The CCPA had been established under section 10 of the Consumer Protection Act, 2019 for regulating matters relating to violation of the rights of the consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers. 

Also read: Govt sets up committees to scrutinise crypto ads, fake online reviews and ed-tech firms