Government Issues New Guidelines To Prevent Misleading Ads; Bans Surrogate Advertisements

The government on Friday came out with new guidelines to prevent misleading advertisements, including those targeting children and making free claims to woo consumers.

The guidelines also specify due diligence to be carried out while endorsing advertisements.

The new guidelines notified by the Consumer Affairs Ministry -- which have come into force with immediate effect -- also prohibit surrogate advertisements and have brought transparency to disclaimers in ads.

Announcing the guidelines, Consumer Affairs Secretary Rohit Kumar Singh said: "Advertisements have a great interest for consumers. Under the CCPA Act, there are provisions to handle misleading advertisements affecting consumers' rights.

"But to make it more explicit, clear and aware to the industry, the government has come out with guidelines for fair advertising with effect from today," he said.

The guidelines will be applicable to advertisements published on all platforms like print, television and online.

Action against violation of the new guidelines will be taken as per the provisions of the Central Consumer Protection Act (CCPA).

Stating that these guidelines will not bring change overnight, the Secretary said, however, it gives a framework for the industry stakeholders to prevent misleading ads even by mistake and will also empower consumers and consumer organisations to file complaints against misleading ads.

The Secretary also mentioned that these guidelines will apply to government advertisements as well. The advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also be in place in a parallel manner.

Elaborating on the guidelines, CCPA Chief Commissioner and Additional Secretary in the Consumer Affairs Ministry Nidhi Khare said: "CCPA has taken action against misleading ads during the pandemic. We felt that there was a need to have guidelines, so that stakeholders are aware of them and do not violate without knowledge."

The new guidelines clearly define what 'misleading advertisement' means and provide various criteria for an advertisement to be considered valid and non-misleading, she said.

It also provides clarity on 'bait' advertisements, and 'free claims' advertisements, while prohibits 'surrogate' advertisements or indirect advertisements.

Bait advertisement means an advertisement in which goods, products or service is offered for sale at a low price to attract consumers.

Besides, the guidelines lay down conditions to be complied with while issuing bait advertisements and free claims advertisements, enumerating various factors to be considered in publishing ads especially targeting children.

Khare said the advertisements should not be "such as to develop negative body image in children or give any impression that such goods, product or service is better than the natural or traditional food which children may be consuming."

That apart, the guidelines provide various duties of manufacturer, service provider, advertiser and advertising agency. They have been asked to indicate the source and date of independent research or assessment in case claims in the ads based on or supported by such research or assessments.

Khare said, "any endorsement must reflect the genuine, reasonably current opinion of the individual, group or organisations making such representation and must be based on adequate information about, or experience with, the identified goods, product or service."

Where Indian professionals are barred under any law from making endorsement in any advertisement, then foreign professionals of such profession are not permitted to make endorsement in such ads, she said.

To bring transparency in disclaimers in advertisements, the guidelines specify the company not to contradict the material claim made in the ads and not attempt to hide material information with respect to any claim made in such ads.

The guidelines also provide for disclosure of material connection.

"If there exists a connection between the endorser and the trader, manufacturer or advertiser of the endorsed product that might materially affect the value or credibility of the endorsement and the connection is not reasonably expected by the audience, such connection should be fully disclosed in making the endorsement," Khare added.

Highlighting steps taken by the CCPA, Khare said, so far, the regulator has issued 113 notices, out of which 57 for misleading advertisements, 47 notices relating to unfair trade practices and nine for violation of consumer rights.

Subsequent to the notices, 14 companies have withdrawn their advertisement with maximum companies claiming more than 99 per cent efficacy against COVID/ germs.

Three companies have issued corrective advertisements, one company has changed its Refund/Replacement policy for the benefit of consumers and also made penal provisions for its sellers in case of any deficiency found, she said.

A penalty of Rs 10 lakh has been imposed on three companies for its misleading advertisements and Rs 1 lakh penalty has been imposed on  three companies for unfair trade practice, she added.