The central government in June 2022 notified new guidelines under the Consumer Protection Act in a bid to curb misleading advertisements. The Central Consumer Protection Authority (CCPA) prohibit the endorser of a misleading advertisement from making any other endorsement for up to one year. For subsequent contravention, prohibition can extend up to three years.
The CCPA can impose penalty of up to Rs.10 lac on manufacturers, advertisers and endorsers for any misleading advertisements. It is to be ensured that consumers are not fooled with unsubstantiated claims, exaggerated promises, misinformation and false claims. For subsequent contraventions, the penalty can go up to Rs.50 lac. Celebrities will have to declare stakes in brands they endorses failing which the advertisement will be considered misleading. It is clause 14 of the notification.
Advertisers do use creative license, and make use of tools like humour and exaggeration to get their point across. The unbridled power to an external agency to scrutinise ads may affect the creative process adversely. It should be ensured that this does not happen.
These guidelines make it mandatory for celebrity endorsers to disclose their material interest in the product they are endorsing. These new rules on Prevention of Misleading Advertisements and Endorsements, 2022 came into force with immediate effect.
Some guidelines are expected for the reviews on e-commerce platforms. Some of these reviews could be fake.
There are exaggerated claims made by Edutech advertisers and cryptocurrency traders. The department of consumer affairs has called a meeting of the stakeholders.
These rules lay down conditions for bait advertisement which offer products at relatively low price to attract consumers.
Advertising was so far a self-regulating profession. However, with the advent of digital advertising, it is necessary to bring an external agency to exercise some control.
No surrogate advertisement or indirect advertisement shall be made for products whose advertising is otherwise prohibited or restricted by law.
Clause 8 of the new guidelines disallows junk food and beverages ads with any children’s programme or channel.