Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022

The Central Consumer Protection Authority has issued Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 to provide for the prevention of false or misleading advertisements and making endorsements. They are applicable to all advertisements regardless of form, format or medium; a manufacturer, service provider or trader whose goods, product or service is the subject of an advertisement, or to an advertising agency or endorser whose service is availed for the advertisement of such goods, product or service.

Applicability Provisions: It applies to

• All advertisements regardless of form, format or medium
• A manufacturer, service provider or trader whose goods, product or service is the subject of an advertisement
• An advertising agency or endorser whose service is availed for the advertisement of goods, products or services

Key Highlights

• The guidelines seek to ensure that consumers are not being fooled with unsubstantiated claims, exaggerated promises, misinformation and false claims. Such advertisements violates various rights of consumers such as right to be informed, right to choose and right to be safeguarded against potentially unsafe products and services.
• The CCPA has been established under section 10 of the Consumer Protection Act, 2019 for regulating matters relating to violation of the rights of the consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.
• 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”.
• A bait advertisement shall not seek to entice consumers to purchase goods, products or services without a reasonable prospect of selling such advertised goods, products or services at the price offered and the advertiser shall ensure that there is adequate supply of goods, products or services to meet foreseeable demand generated by such advertisement.
• Conditions for advertisements targeting children have been made. Furthermore, an advertisement for junk foods, including chips, carbonated beverages and other such snacks and drinks should not be advertised during a program meant for children or on a channel meant exclusively for children.

Duties of advertisers

All entities to whom these guidelines apply should ensure that

• all descriptions, claims and comparisons in an advertisement which relate to matters of objectively ascertainable facts should be capable of substantiation if required by the CCPA
• the advertisement indicates the source and date of independent research or assessment in cases where claims are expressly stated to be based on such research or assessments
• the advertisement should not contain any reference to a person, firm or institution in a manner which confers an unjustified advantage on the product so advertised or tends to bring such person, firm or institution to ridicule or disrepute, unless requisite permission has been obtained by the advertiser
• the advertisement should not contain statements or visual presentations which directly or by implication, omission, ambiguity, or exaggeration are likely to mislead consumers about the product advertised, the advertiser, or any other product or advertiser
• advertisement is so framed as not to abuse the trust of consumers or exploit their lack of experience or knowledge.

About Disclaimers

Guidelines stipulates that disclaimer shall 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 shall not attempt to correct a misleading claim made in an advertisement. Further, it provides that, a disclaimer shall 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.

Penalty Clause (defined by Consumer Protection Act)

• CCPA can impose penalty of upto 10 lakh rupees on manufacturers, advertisers and endorsers for any misleading advertisements.
• For subsequent contraventions, CCPA may impose a penalty of upto 50 lakh rupees.
• The Authority can prohibit the endorser of a misleading advertisement from making any endorsement for upto 1 year and for subsequent contravention, prohibition can extend upto 3 years.

Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.