GUIDELINES FOR PREVENTION OF MISLEADING ADVERTISEMENTS AND ENDORSEMENTS FOR MISLEADING ADVERTISEMENTS 2022

Posted on July 4, 2022 by DRAFTBIZ wrote in Legal Updates.

GUIDELINES FOR PREVENTION OF MISLEADING ADVERTISEMENTS AND ENDORSEMENTS FOR MISLEADING ADVERTISEMENTS 2022 – KEY HIGHLIGHTS

Notified through Gazette Notification dated 09 June 2022, the new Guidelines on Misleading Advertisements and Endorsement of Misleading Advertisements are effective w.e.f. 09 June 2022. The Advertising Agencies and Advertiser have been brought clearly in purview of Central Consumer Protection Authority which is a statutory body empowered to take actions under laws of India, more particularly under Consumer Protection Act 2019 and it’s rules, regulations and guidelines issued from time to time. Manufacturing and Service Industry who engage advertising companies and agencies for content creation & marketing activities through contracts will have to ensure compliance of provisions of these guidelines. Consumers who fall pray to misleading and attractive advertisement can initiate proceedings against such Legal Entities under provisions of the provisions the new Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022. Consumers can also initiate proceedings against the Endorsers of such Misleading Advertisements.

Celebrities who are endorsing products or services can also be held liable under Guidelines and may face action for endorsing misleading advertisement. Endorsers should conduct proper due diligence before endorsing products and services.

WHAT IS BAIT ADVERTISEMENT:

• Advertisement in which goods/products/services are offered for sale at low price to attract consumers.

• Such advertisements shall have reasonable prospect of selling goods/products/services. (Ex – Stock Clearance Sale)

• Ensure adequate supply to meet foreseeable demand which is generated out of such advertisement

• Mention a reasonable grounds/period/quantities wherein advertiser will not be able to supply the advertised goods

• Mention restrictions including geographic restrictions, age-limit, etc.

• Not mislead consumers about the market conditions with respect to their availability & price

SURROGATE & FREE CLAIMS ADVERTISING

• No surrogate advertisement or indirect advertisement for goods or services whose advertising is prohibited or restricted by law by circumventing such prohibition or restriction;

• No free claims if the consumer has to pay anything other than the unavoidable cost of responding to such advertisement and collecting or paying for the delivery of such item; or make clear the extent of commitment that a consumer shall make to take advantage of a free offer.

DISCLAIMER

• Disclaimer may expand or clarify the main offer but cannot contradict or hide the material claim made in the advertisement or attempt to correct a misleading claim made in the advertisement.

• Disclaimer should be in the same language and font as the claim made in the advertisement and that the placement of the disclaimer shall be at a prominent and visible place on the packaging (ideally be on the same panel).

• If a claim in an Advertisement is presented as a voiceover, the disclaimer shall be displayed in sync with the voiceover and at the same speed as the original claim made in the advertisement.

WHAT IS NON-MISLEADING AND VALID ADVERTISEMENT

(a)Truthful and honest representation;

(b)Non-exaggeration of accuracy, scientific validity or practical usefulness or capability or performance or service of the goods or product;

(c)Advertisement should not present a right as advertiser’s distinctive feature;

(d)Advertisement should not claim universal acceptance if there is a significant division of informed or scientific opinion on such claims;

(e)Advertisement should not mislead consumer on their personal security if they fail to purchase the advertised product;

(f)Advertisement should not mislead consumers by unsubstantiated claims;

(g)Advertisement is compliant with relevant sector specific laws (Example – Pharma);

If any occasional and unintentional lapse in mass manufacture and distribution of goods, products and services, such unintentional lapse may not invalidate the advertisement, provided–

(a)promise or claim is capable of fulfilment by a typical product specimen;

(b)failures is within the generally acceptable limits;

(c)the advertiser has taken prompt action to make good the deficiency to the consumer.

WHAT ARE DUTIES OF MANUFACTURER, SERVICE PROVIDER, ADVERTISER AND ADVERTISING AGENCY

1. all descriptions, claims and comparisons in an advertisement which relate to matters of objectively ascertainable facts shall be capable of substantiation and produce such substantiation if required by the Central Authority;

2. the advertisement shall indicate source and date of independent research or assessment if there are such claims in the advertisement;

3. advertisement shall not refer any person, firm or institution for an unjustified advantage on the product so without consent/permission;

4. advertisement shall not contain statements or visual presentations which in any manner will mislead consumers about the product;
5. Advertisement shall not abuse trust of consumers or exploit their lack of experience/knowledge and for this purpose, –

i. if advertisement may not make claims which use expressions such as “upto five years guarantee” or “Prices from as low as Rs. “Y”, instead shall clearly indicate a fixed period of guarantee of the product or a fixed price at which the product is being offered; and in case, the product has different periods of guarantee for different parts or components, it shall clearly indicate the minimum and maximum of such periods for each parts and components;

ii. if advertisements invites public to take part in lotteries or prize competitions or hold out the prospect of gifts, it shall clearly set out all pertinent material terms and conditions;

Exception to Untrue or Exaggerated Advertisement is that such advertisements are intended to amuse or catch the eye of consumers only. They must clearly appear as humorous or hyperbolic and not likely to be understood as making literal or misleading claims.

POWER OF CENTRAL CONSUMER PROTECTION AUTHORITY (CCPA)

CCPA can impose a penalty of up to Rs 10 lakh on manufacturers, advertisers and endorsers for any misleading advertisements.

For subsequent contraventions, CCPA may impose a penalty of up to Rs 50 lakh.

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GUIDELINES FOR PREVENTION OF MISLEADING ADVERTISEMENTS AND ENDORSEMENTS FOR MISLEADING ADVERTISEMENTS 2022