Business

Celebs could end up in jail for misleading advertisements

31 Aug 2016 | By Supriya Kaur
Onus of misleading advertisements falls on Brand Ambassadors

Under the draft Consumer Protection Bill, 2015, provisions penalizing celebrities for endorsing products with misleading claims are likely to be introduced.

Celebrities as brand ambassadors can be punished with imprisonment up to five years and a penalty of Rs.50 lakh

These recommendations were made by a Parliamentary Panel constituted by the Consumer Affairs Ministry (CAM) and will be taken up by a Group-of-Ministers.

In context: Onus of misleading advertisements falls on Brand Ambassadors

AboutConsumer Protection Bill 2015

In August last year, the Central Government introduced the Consumer Protection Bill, 2015 in the Lok Sabha.

This bill is intended to repeal the Consumer Protection Act, 1986.

The CAM had set up a Parliamentary Standing Committee which submitted its report in April 2016.

Ensuring accountabilityParliamentary Panel's recommendations

The CAM accepted recommendations to make celebrities liable for 'endorsing' products that make unrealistic claims. The onus rests on the brand ambassadors to prove their innocence.

For making false claims, heavy penalties and stringent punishment for the manufacturer and service provider have been proposed.

Imprisonment as well as suspension and cancellation of license have been proposed for those indulging in adulteration.

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Broadening scope of Consumer Protection

Regulating e-commerceBroadening scope of Consumer Protection

A new executive agency, Central Consumer Protection Authority (CCPA), will be established for the purposes of filling "an institutional void in the regulatory regime extant".

The new law seeks to empower the CCPA to make regulations for e-commerce, multi-level marketing and direct selling.

The aim of these regulations will be to protect the rights of consumers as well as to check unfair trade practices.

DetailsComplaints soar against advertisements

In May 2016, the Consumer Complaints Council of Advertising Standards Council of India (ASCI) received 155 complaints against advertisements across food & beverage, e-commerce and consumer durables.

The ASCI upheld 109 out of 155 complaints and companies pulled up for exaggerated or misleading claims included LG India, PepsiCo, Britannia, Havells, Flipkart and others.

10 complaints against Patanjali Ayurved were also upheld by the ASCI.

31 Aug 2016Celebs could end up in jail for misleading advertisements

Penalty on frivolous complaints - gone!

Under the extant law, consumers could be fined heavy penalties for making frivolous and vexatious complaints against a manufacturer or supplier. Although there was a proposal to increase penalty, this provision has now been removed under the revised consumer protection bill!