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India – Misleading Advertisements: Advertisers and Brand Ambassadors Beware !

Consumer courts are getting tougher these days. Gone are the days when advertisers and brand ambassadors could get away with anything- exaggerated or misleading advertisements. Legal provisions and judicial pronouncements are becoming unsparing. There is enough of caselaw in the country where advertisers and brand ambassadors were taken to task.

Recently, The Krishna District Consumer Forum-2 has imposed ₹2 lakh fine on a private health care centre for deceiving a customer and directed it to return the fee with 9% interest to the petitioner. It also ordered the centre management to stop giving false advertisements and warned that celebrities would also be fined, if they cheated the public by performing in such publicity. More information on this can be accessed on the following links:

https://www.thehindu.com/news/national/andhra-pradesh/slimming-centre-fined-2-lakh-for-false-publicity/article26344903.ece

https://www.ap7am.com/lv-309211-consumer-court-bans-actress-rashi-amp-ramba-kolors-ads.html

It is important to know that The Consumer Protection Bill, 2018 provides for penalties to the endorser also.


Sec 21: Power of Central Authority to issue directions and penalties against false or misleading advertisements.
• A penalty of up to Rs 10 lakh may be imposed on a manufacturer or an endorser. For a subsequent offence, the fine may extend to Rs 50 lakh. The manufacturer can also be punished with imprisonment of up to two years, which may extend to five years in case of every subsequent offence.
• The Central Consumer Protection Authority (CCPA) can also prohibit the endorser of a misleading advertisement from endorsing any particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years. There are certain exceptions when an endorser will not be held liable for such a penalty.


Chapter no. VI of the bill discusses various aspects relating to product liability. There is more clarity on when liability arises. The bill aims to reduce cost of litigation and make it less time consuming.


It is therefore imperative that advertisers and brand ambassadors should be more careful and responsible lest they face potential penalties/ liability. Risk transfer by way of appropriate liability insurance merits serious evaluation.

P.Umesh

www.liabilityinsurancepractice.com