Govt Issues New Guidelines To Curb Misleading Ads; Bans Surrogate Ads

The government on Friday announced new guidelines to curb misleading advertisements and endorsers by banning surrogate ads, while imposing strict norms for those advertisements that seek to lure consumers offering discounts and free claims.

The new guidelines on "Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022" also seeks to regulate advertisements targeting children.

The guidelines, notified by the consumer affairs ministry and that have come into force with immediate effect, also specify due diligence to be carried out while endorsing in advertisements.

Action against violation of the new guidelines will be taken as per the provisions of the Consumer Protection Act (CPA), which provides for a penalty of Rs 10 lakh for first offence and Rs 50 lakh for subsequent contravention.

Announcing the guidelines, consumer affairs secretary Rohit Kumar Singh said: "Advertisements have 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.

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 issued by PSUs engaged in providing consumer services, he said.

The advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also be in place in a parallel manner, he added.

Elaborating on the guidelines, regulator Central Consumer Protection Authority (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."

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

The guidelines forbid advertisements from exaggerating the features of product or service in such 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 recognized body.

In a statement issued later, the government said advertisement targeting children should not feature any personalities from the field of sports, music or cinema for products which under any law requires a health warning for such advertisement or cannot be purchased by children.

Since the disclaimers in advertisements play a pivotal role from consumer perspective since, in a way it limits the responsibility of the company, the guidelines stipulates that disclaimer should 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 should not attempt to correct a misleading claim made in an advertisement.

Further, it provides that a disclaimer should 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.

That apart, clear guidelines are laid for duties of manufacturer, service provider, advertiser and advertising agency, due diligence to be carried out before endorsing and others.

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, foreign professionals of such profession are not permitted to make endorsement in such ads, she said.

The guidelines aim to protect consumers interest through bringing in more transparency and clarity in the way advertisements are being published, so that, consumers are able to make informed decisions based on facts rather than false narratives and exaggerations.

The government said the penalty for violating the guidelines are also clearly outlined. The consumer protection regulator can impose a penalty of up to Rs 10 lakh on manufacturers, advertisers and endorsers for any misleading advertisements. For subsequent contravention, CCPA may impose a penalty of up to Rs 50 lakh.

The authority 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.