The Central Consumer Protection Authority (CCPA) recently issued guidelines to prevent false or misleading advertisements.

Guidelines on Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022: Key takeaways

(1) Conditions for non-misleading and valid advertisement

An advertisement shall be considered to be valid and not misleading:

• If it contains truthful and honest representation;
• Does not mislead consumers by exaggerating the accuracy,
• Scientific validity or practical usefulness or capability or performance or service of the goods or product;
• Does not present rights conferred on consumers by any law as a distinctive feature of advertiser’s offer.

 (2) Bait Advertisement

• 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.
• The advertiser shall ensure that there is an adequate supply of goods, products or services to meet foreseeable demand generated by such advertisement.

(3) Prohibition of surrogate advertising

• No surrogate advertisement or indirect advertisement shall be made for goods or services whose advertising is otherwise prohibited or restricted by law.
• No circumventing of such prohibition or restriction and portraying it to be an advertisement for other goods or services shall be allowed.

(4) Free claims advertisements

• A free claims advertisement shall not describe any goods, product or service to be ‘free’, ‘without charge’ or use such other terms if the consumer has to pay anything other than the unavoidable costs.
• Seller must make clear the extent of commitment that a consumer shall make to take advantage of a free offer.

(5) Children targeted advertisements

• An advertisement that addresses or targets or uses children shall not condone, encourage, inspire or unreasonably emulate behaviour that could be dangerous for children or take advantage of children’s inexperience, credulity or sense of loyalty.

(6) Limitations on Celebrity Endorsers

• The government has tightened norms for endorsers, including celebrities and sportspersons.
• They are now required to make material connection disclosures and undertake due diligence while doing advertisements.
• Endorsements must reflect the honest opinions, belief or experience of the endorsers.
• The endorsers have to make material connection disclosures and failing to do so will attract penalty under the Consumer Protection Act (CPA).
• Material disclosures mean any relationship that materially affects the weight or credibility of any endorsement which a reasonable consumer would not expect.
• Violation of these guidelines will attract a penalty of ₹10 lakh for the first offence and ₹50 lakh for the subsequent offence, under the CPA.

(7) ASCI rules

• The latest guidelines will also apply to government advertisements.
• Moreover, the advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also be in place in a parallel manner.

Back2Basics:

Explained: Central Consumer Protection Authority (CCPA)

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