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Celebrities, manufacturers may be jailed, penalised for misleading advertisements

BusinessToday.In     July 31, 2019

According to a new bill passed in the Lok Sabha on Tuesday, celebrities could be penalised or even jailed for misleading advertisements. The Consumer Protection Bill 2019, introduced by Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, states that endorsers and manufacturers could face jail term of up to five years and a fine of up to Rs 50 lakh for misleading advertisements. The Bill aims to fortify the rights of consumers and provide a redressal mechanism for various complaints.

Manufacturers and service providers found guilty will be given a jail term of maximum two years along with fine of up to Rs 10 lakh. Celebrities who endorse such products will be fined up to Rs 10 lakh. When it comes to repeat offences, authorities can impose a fine of up to Rs 50 lakh and jail term of up to five years. The Bill also states that celebrities can be banned from advertisements for up to a year, while for the repeat offenders it can stretch up to three years.

The penalty will be imposed only if manufacturers or endorsers fail to discontinue the advertisement or modify them. Moreover, endorsers will not be liable if they can prove that they had done their due diligence to verify claims by the advertisers. 

The Consumer Protection Bill, 2019, will penalise misleading advertisements placed on every medium including television, radio, telemarketing, e-commerce, print, outdoor ads and direct selling. The Bill is yet to become a law.

The Bill defines a misleading advertisement as one that "falsely describes a product or service; or gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice or deliberately conceals important information".

A government-appointed chief commissioner will head the Central Consumer Protection Authority that will regulate matters relating to violation of consumer rights, unfair trade practices and misleading advertisements. 

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