The Central Consumer Protection Authority (CCPA) on June 9th of 2022 issued guidelines aiming to further protect consumers from claims and promises from advertisements that are misleading, baseless, unjustified, unrealistic, false, etc. This was formed by the powers vested with the CCPA under Section 18 of the Consumer Protection Act (CPA), 2019 to protect consumer rights, such as the Right to be informed, the Right to choose, and the Right to safeguard against potentially misleading products and services, granted under Section 2(9) of the CPA 2019. The guidelines are applicable to all types of advertisements published on television, radio, print, and social media. They are in addition to and not in derogation of such regulations in other laws like the Press Council Act, 1978 (37 of 1978) and the Cable Television Networks (Regulation) Act, 1995 (7 of 1995).
CPA 2019 defines a misleading advertisement as, “an advertisement, which — (i) falsely describes such product or service; or (ii) 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 (iii) 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 (iv) deliberately conceals important information”. These guidelines, additionally define a few terms like ‘surrogate advertisement’, ‘bait advertisement’, and ‘free claim advertisement’.
For an advertisement to be considered non-misleading and valid, and to help in protecting consumers from being deceived, the advertisement should be
- true to the nature of the product;
- not mislead consumers by exaggerating validations or about the risks of not availing of an offer,
- be independently backed up by evidence
- be in compliance with the existing laws
Bait advertisements are such advertisements that are produced or advertised with the intention of luring consumers into buying products or services at prices much lower than the actual price.
- A bait advertisement should not be published unless there is a valid purpose (for example, sales of garments with minor defects, second sales, export surplus etc) for selling the goods at such a low price.
- The advertiser should ensure that there is sufficient stock of the product or service to meet anticipated demand. If there is not, the disclaimer of limited availability should be expressed in the advertisement.
- There should be a clear indication if such an advertisement is screened to gauge demand.
- If the advertiser or producer is unable to offer the product for particular reasons during a time period, it should be explicitly stated in the advertisement.
- The advertisement should not omit critical information like age or regional constraints.
Surrogate advertisements are advertisements for products or services which are considered illegal (eg, tobacco products, alcohol) and have restrictions in place, yet disguised as advertisements for other products or services that are legal and have no restrictions. The following shall also be considered a surrogate advertisement if
- any advertisement that directly or indirectly indicates to the consumers that it is an advertisement for products or services restricted by law and is considered illegal.
- any advertisement with its association to an advertisement through its brand name, logo, colour, layout and presentation that is prohibited by law.
Free claims advertisements advertise the offering of products or services for free. It should not
- use tags like ‘free’, ‘without charge’ or similar if the consumer has to pay any other charges other than the means to collect the product, like shipping charges.
- be stated free if the consumer has to cover the packaging, handling or administration of such free product or service.
- reduce the quality or quantity of the product or service when availed or purchased as free.
- mention ‘free trial’ if what it actually conveys is that, after purchase, if the consumer is dissatisfied with the product, he can return it for a full refund. This cannot be considered a ‘free trial’ as the consumer has to purchase the product or service to test their satisfaction.
Child-targeted advertisements: A number of preventative rules have been established regarding commercials aimed at children, taking into account the sensitivity and fragility of children as well as the damaging effects advertisements could have on their developing minds. Guidelines prohibit inflating a product or service's qualities in a way that could give children unjustified expectations of it. They also prohibit making any nutritional or health claims or benefits that have not been sufficiently and scientifically supported by a recognised body. According to guidelines, advertisements for products that have health warnings on them, or that cannot be purchased by children should not feature celebrities from the fields of sports, music and cinema. It further prohibits advertisements for junk foods, including chips, carbonated beverages and other such snacks and drinks during programs meant for children or on channels meant exclusively for children
From the standpoint of the consumer, disclaimers in advertisements are crucial since they in a sense limit the liability of the business. As a result, guidelines state that disclaimers must not contradict the material claim made in the advertisement; try to withhold information that is relevant to any claim made in the advertisement; and whose omission or absence is likely to make the advertisement misleading or hide its commercial intent. They also must not try to correct a misleading claim that has already been made in an advertisement. Additionally, it stipulates that a disclaimer must be written using the same language as the advertisement's claim, that the font used must match that of the claim, and that it should be placed in a prominent place.
Besides, the guidelines clearly establish the duties of manufacturers, service providers, advertisers, advertising agencies, which include:
- Advertisement that claims, describes and compares to an objectively verifiable fact must be substantiated and proved if the authority requires.
- To clearly provide the source and date of research if stated as ‘supported by or based on’ in the advertisement
- Advertisements may not allude to any person, firm, or organisation in such a way that there is an unjustified advantage for the product being advertised or the person, firm, or organisation is brought into disrepute or ridicule, unless the advertiser has first received the necessary consent from such person, firm, or institution.
- Advertisements shall not make claims or use visuals that could mislead customers regarding the advertised product, the advertiser, or any other product or advertiser, either directly or indirectly, by omission, ambiguity, or exaggeration.
- Advertisement is constructed to not betray customer confidence or take advantage of their inexperience or ignorance.
The individual acting as the endorser should support the claims genuinely and must be provided with adequate information to support these claims.
Provisions under the CPA, 2019 allow the CCPA to impose fines upto 10 lakhs on producers, advertisers and endorsers of misleading advertisements. For subsequent violations, the Authority can levy a penalty of upto 50 Lakhs. The Authority can prevent the endorser of such misleading advertisement from endorsing for upto 1 year and for successive violations, the period can extend upto 3 years.
By increasing transparency and clarity in the way an advertisement is released, customer interests as well as their rights to make informed decisions are protected better through these guidelines. If enforced, customers can make informed judgments based on facts rather than embellishments and false narratives. Consumers now need to be made aware of the guidelines and the methods for challenging unsubstantiated advertisements, so that the public really benefits from these rules. Overall, the guidelines are a definite way forward.