Consumer Protection Bill 2018: What is 'misleading' and where can consumers verify claims, ask advertisers

The new Consumer Protection Bill of 2018 proposes severe action including imprisonment against advertisers for false and misleading advertisements

e4m by Venkata Susmita Biswas
Published: Jan 10, 2018 9:00 AM  | 4 min read

If the new and improved Consumer Protection Bill of 2018 introduced in the Lok Sabha on the last day of the winter session gets the green signal, the next ad that promises the whitest teeth, fairest skin and highest returns will not only be axed, but also the advertisers may land up in jail.
The bill proposes severe penalties for manufacturers and service providers for false and misleading ads including a fine of up to Rs 50 lakh and jail up to five years.

Celebrities are not liable to a jail term under the bill and will also be protected by indemnity bonds that they sign with the brands. But the bill does put the onus on celebrities to verify the veracity of the claims regarding the product or service before endorsing the same. If they fail to do so, the celebrity may be prohibited from making an endorsement of any product or service for one year, extendable to three years for every subsequent contravention.

This is very similar to the obligation that Advertising Standards Council of India places on celebrities. The ASCI code on celebrity endorsements notes that a “celebrity should do due diligence to ensure that all description, claims and comparisons made in the advertisements they appear in or endorse are capable of being objectively ascertained and capable of substantiation and should not mislead or appear deceptive.”

The advertising fraternity welcomes the proposed Bill that will safeguard the interests of the consumer. "This Bill is also important for the Indian marketplace which has a bad reputation because brands over-promise and under-deliver," said Saurabh Uboweja, founder and CEO Brands of Desire. He added, “Consumers across the board are vulnerable to all kinds of malpractices as a result of which brands and non-brands/manufacturers have a predatory attitude and can get away with pretty much everything. This Bill will act as a tremendous deterrent for a lot of manufacturers when it comes not just to communication but more importantly adulteration of products.”

While that is the general feeling among brands and agencies that create the communication for brands, the nuances of the implementation process need further clarity they say. What is misleading, and who defines ‘misleading’?

Advertising not only informs but also entertains, pointed out Sudip Ghose, Senior Vice President, Sales and Marketing, VIP Industries. He expressed concern about creativity being curbed by this Bill. Ads tend to take some creative liberties and if they do not harm the consumer, they should be permissible. Therefore, Ghose said, “What is misleading to you may not be misleading to me. This is grey area right now; it has to be formalised. For that you need someone (ASCI) to define what we can do and what we cannot do. ASCI now needs to make very clear and explicit guidelines as to what is allowed and what is not.”

The other hurdle with implementation and the concept of misleading is that there is no repository of information where consumers or celebrities can verify claims.  “The fundamental requirement for the redressal mechanism to work is greater information,” said Karan Kumar, Chief Marketing Officer, Fab India. He was of the opinion that the Indian marketplace needs an RTI/Wikipedia equivalent which consumers can look up to find information about products and services. “What is the one place where consumers can go and log a question? Many consumers now do that on social media. A lot of brands do respond, but what is the recourse for consumers when brands do not respond? How can the consumer verify that what a brand is claiming is genuine? Even the celebrity cannot verify the same if the consumer cannot do so,” he noted. 
However, Kumar added that the new law and the punishment are both welcome. “I do not want the punishment to be watered down. But with a law and punishment like this, my only expectation is that the industry should put up a formal reservoir of knowledge on brands and products where consumers can verify claims. If that platform or network is not in place, none of this will work,” he said.

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