Explained | The new ad guidelines, their aim and scope

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To curb misleading advertisements and protect consumers, the Central Consumer Protection Authority (CCPA) has issued a set of guidelines, the latest effort to crack down on inflated promises and fraudulent claims that plague the industry.

The “Guidelines for Prevention of Misleading Commercials and Endorsements for Misleading Advertisements, 2022”, released on June 9, also spell out penalties for producers, those who endorse a product or service and the advertiser for violating the norms.

Here are some of the highlights:

1 Purpose

These standards are aimed at protecting customers from unfounded claims, inflated promises and misinformation and fraudulent claims, the Consumer Affairs Ministry, under which CCPA works, said while releasing the guidelines.

Such advertisements infringed on a variety of consumer rights, including the right to be informed, the right to choice, and the right to be protected from potentially dangerous products and services.

2 Liability

Violations of the guidelines will invite fines. For any misleading advertisements, the CCPA can impose a penalty of up to Rs 10 lakh on producers, advertisers, and endorsers. It also has the authority to levy a penalty of up to Rs 50 lakh for repeated violations.

It can ban an endorser, who on most occasions is a celebrity, of a misleading advertisement from endorsements for up to a year. The ban can extend to three years for further violations.

Also read: Storyboard18 | Decoding govt’s new guidelines on celebrity endorsements & surrogate ads

3 Ads targeting children 

Advertisements cannot exaggerate the features of a product or service in a way that children develop unrealistic expectations of it, and from making any health or nutritional claims or benefits that have not been adequately and scientifically substantiated by a recognised body, the guidelines say.

Advertisements aimed at children must not use celebrities from the field of sports, music, or films for products that require a health warning or cannot be purchased by children.

4 Disclaimers 

The disclaimer will have to be in the same language and the same font as the claim made in the advertisement. It should also be placed prominently on the packaging.

Disclaimers play an important function from the consumer's perspective because they limit the company's liability.

"Therefore, guidelines stipulate that disclaimer shall not attempt to hide material information with respect to any claim made in such advertisement, the omission or absence of which is likely to make the advertisement deceptive or conceal its commercial intent and shall not attempt to correct a misleading claim made in an advertisement," the ministry said.

5 Exceptions

The guidelines exempt advertisements intended to amuse or catch the attention of consumers through the means of obvious untruths or exaggerations that can be seen as humorous or hyperbolic and are unlikely to be understood as making literal or misleading claims for the advertised product.

The standards were designed to protect the consumer interest by increasing transparency and clarity in the way advertisements were released, allowing customers to make more informed decisions, the ministry said.