Celebrities must disclose interest in products they endorse: Govt

The central government on Friday notified new guidelines under the Consumer Protection Act in a bid to curb misleading advertisements. These guidelines make it mandatory for celebrity endorsers to disclose their material interest in the product they are endorsing, prohibit surrogate advertisements, and also lay down rules that should govern ads that involve children or child products.

These new rules on Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 —which have come into force with immediate effect — lay down conditions that must be met while issuing bait advertisements or free-claim advertisements.

Bait advertisement means an advertisement in which goods, products, or services are offered for sale at a relatively low price to attract consumers.

“It has been seen that many times while giving free offers, companies restrict the same to just a few items or impose conditions for availing the offer. This should be discouraged,” Consumer Affairs Secretary Rohit Kumar Singh said while releasing the guidelines.

For advertisements involving children or child-related products, the guidelines categorically state that such ads shall not be such that they develop a negative body image among children or give any impression that the product is better than the natural or traditional food which the child might be consuming.

"Advertisements are of great interest to consumers. Under the Act, there are provisions to handle misleading advertisements affecting consumer rights. But to make them explicit and clear to industry, the government has come out with guidelines for fair advertising with effect from today," Singh said.

These guidelines will be applicable to advertisements published on all media platforms, such as print, television, and online.

Both government and private advertisements shall be covered by the new set of rules. “The guidelines define a seller and whosoever he is -- whether government body or private -- is covered under the provisions,” Singh said.

Those in violation of the new guidelines will be dealt with according to the provisions of the Central Consumer Protection Act (CCPA).

The guidelines also state that if any manufacturer, service provider, advertiser, or advertising agency makes a claim based on independent research or study, it should clearly indicate the source and date of such independent research, so that consumers are not misled.

On celebrity endorsements, the guidelines state that all celebrities endorsing a product must carry out due diligence about the product before agreeing to endorse it.

“The advertisement must reflect the genuine, reasonably current opinion of the individual, group or organisation making such representation and must be based on adequate information about, or experience with, the identified goods, product or service,” the guidelines say.

For transparency in disclaimers in advertisements, the guidelines specify the company should neither contradict the material claim made in the ad nor attempt to hide material information with respect to any claim made in that.

“Disclaimers should also be in the same language as the main ad and should be legible and understandable. For example, in the case of mutual funds, the disclaimers are said so 'fast' that hardly any consumer understands those,” said Nidhi Khare, Central Consumer Protection Authority (CCPA) chief commissioner and additional secretary in the consumer affairs ministry, during the press conference.

On advertisements involving children, the guidelines state that children-targeting advertisements should not claim that consumption of a product advertised will have an effect on enhancing intelligence or physical ability or bring exceptional recognition without any valid substantiation or adequate scientific evidence.

Any advertisement that exploits children's susceptibility to charitable appeals should explain the extent to which their participation will help in any charity-linked promotion.