Combating Misleading Advertisements: Regulations and Guidelines in India

Introduction

Misleading advertisement, as the name suggests, refers to the process of transmission, display, or publication of information that contains falsified data, claims, or statements intended to promote the sale of products.

The main aim of misleading advertisements is to promote the sale of the goods or services of the company by showcasing features that are either not true or are made with the intent to defraud the consumers. The practice of misleading advertisements is not only in violation of the law but also hinders consumer choice and leads to unfair competition in the market.

Section 2(1)(r) of the Consumer Protection Act, 1986 covers the ambit of “unfair trade practice” which includes any practice undertaken by the seller in order to increase their sale by exercising any unfair or deceptive method such as hoarding goods, misleading advertisements, incorrect representations, etc.

Role of Insurance Advertisements and Disclosure Regulations 2000 in Defining Misleading Advertisements

The Insurance Advertisement and Disclosure Regulations (IRDA) 2000 have made an attempt to define unfair and misleading advertisements by specifying the following types:

1. Advertisements and claims intended to claim the performance of the product beyond its reasonable ability, capacity, and expectations. 
2. Enlisting those benefits or features of the product/service which do not match the actual delivery.
3. Usage or omission of words, phrases, or expressions in such a manner that the risks or costs associated with the product are hidden.
4. Implying a relationship or affiliation with any organisation or individual which does not exist or is made up only for influencing the buyer.

Many other practices like giving false warranties, showcasing false licenses, tricks, or images, giving discounts and gifts, exaggerating the attributes of the product, etc., are covered under the ambit of misleading advertisements.

Role of the Department of Consumer Affairs in Combating Misleading Advertisements

In 2014, the Department of Consumer Affairs, in collaboration with the Government of India, established an inter-ministerial monitoring committee to serve as a vigilance body, which includes the Advertisements Standards Council. Additionally, the government launched an online web portal for consumers to lodge complaints against misleading advertisements. Several agencies like FSSAI, RBI, NPPA, and others have initiated counter-advertisement and campaigning programs. Moreover, large industrial organizations and multinational companies operating in India have been directed to allocate a portion of their corporate social responsibility (CSR) funds to address the issue of misleading and false advertisements.

To tackle this unethical practice, several legislations have been enacted, including:

1. The Bureau of Indian Standards (Certification) Regulations, 1988
2. Food Safety and Standards Act, 2006
3. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1955
4. The Drugs and Cosmetics Act, 1940
5. The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003

Guidelines for Preventing Misleading Advertisements in India

In 2022, the Central Consumer Protection Authority (CCPA) issued the “Guidelines for Prevention of Misleading Advertisements and Endorsing for Misleading Advertisements 2022” through a notification dated June 9, 2022. These guidelines aim to define the essential elements of a valid advertisement and differentiate misleading advertisements from valid ones, while also identifying the key aspects of advertisements that impact different groups of people.

The guidelines highlight the following essentials of a valid advertisement:

• Truthfulness and honest representations.
• Avoidance of misleading consumers through exaggerated facts, inaccurate claims, lack of scientific validity, or practical usefulness, including the capacity and utility of the product or service.
• Exclusion of any distinctive features or rights provided by law that falsely entice consumers.
• Prevention of misleading users about potential threats to themselves or their families in case of failure to purchase the product, coercing consumers into making a purchase.
• Emphasis on clear disclaimers and the prohibition of concealing or hiding material details of the product, which would make it deceptive.

Considering the vulnerability and sensitivity of children, the guidelines instruct that advertisements should not make claims about the health or nutritional benefits of the product or service. Additionally, they should not make children feel disadvantaged, inferior, or left out if they are unable to purchase the product. Moreover, advertisements should not promote qualities or attributes in a product that are scientifically unattainable.

The guidelines adopt a strict stance against surrogate advertisements, and bait advertisements, and restrict the use of free claims advertisements under specific circumstances.

Conclusion

The issue of misleading advertisements, which originated from the Monopolies and Restrictive Trade Practices Act, has posed a significant challenge in the Indian economic market. The current guidelines regarding misleading advertisements have taken a firm stance against those in violation of the law and have established clear distinctions between valid and misleading advertisements.

However, it cannot be claimed that the problem of misleading advertisements has been entirely eradicated. The government and relevant authorities must take stringent actions, including implementing robust penalties and provisions, to make the law more effective in addressing this issue.

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