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Consumer Protection – New guidelines to curb misleading ads

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Penalty of Rs 10 lakh for the first offense and Rs 50 lakh for subsequent contravention

New Delhi. 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 by offering discounts and free claims.

The new guidelines on “Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022” also seek 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 the first offense 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, 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.

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

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.”

“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.

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