Misleading Advertisements in India: A Legal and Ethical Overview

[YAGAY andSUN]

Here’s an article on Misleading Advertisements in the Indian Context, covering legal, ethical, and regulatory aspects:

In today’s information-saturated marketplace, advertisements wield enormous influence on consumer behavior. While most ads aim to inform or persuade, some cross ethical and legal boundaries, resulting in misleading advertisements. In India, such ads are a growing concern, often leading consumers to make uninformed or deceptive purchasing decisions.

What is a Misleading Advertisement?

A misleading advertisement is one that:

• Falsely describes a product or service.
• Gives a false guarantee or misrepresents the facts.
• Deliberately conceals important information.
• Creates an unrealistic expectation in the consumer’s mind.

Misleading advertisements are not just unethical — they are legally punishable offenses under Indian law.

Legal Framework Governing Misleading Ads in India

1. Consumer Protection Act, 2019

The Consumer Protection Act, 2019 is the most comprehensive law addressing misleading advertisements in India.

• Definition: The Act defines a misleading advertisement as one that falsely describes a product/service or is likely to mislead consumers about the nature, quantity, or quality of the product/service.
• Penalties:
  • For manufacturers/advertisers: Fines up to ₹10 lakh (first offense) and ₹50 lakh for repeat offenses.
  • For endorsers/celebrities: Ban on endorsements for up to 1 year (first offense) and up to 3 years (repeat offenses).
• Central Consumer Protection Authority (CCPA): Established under the Act to investigate, recall goods/services, issue safety notices, and impose penalties for misleading ads.

2. Advertising Standards Council of India (ASCI)

Though not a statutory body, the ASCI plays a key role in self-regulation of advertising content.

• ASCI Code: Advertisements must be truthful, honest, and not offensive. They should not mislead by ambiguity or omission.
• Grievance Redressal: Consumers can file complaints against misleading ads. ASCI’s Consumer Complaints Council (CCC) investigates and can recommend ad withdrawal.
• ASCI decisions, though not legally binding, are usually respected by advertisers and broadcasters.

3. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954

Prohibits misleading claims related to the treatment or prevention of specific diseases using drugs, magical remedies, or traditional systems.

• Commonly violated in ads for weight loss, sexual wellness, or miracle cures.
• Offenders may face imprisonment and fines.

4. Other Relevant Laws

• Indian Penal Code (IPC) – Sections like 415 (Cheating) and 420 (Fraud) may apply to fraudulent ads.
• Food Safety and Standards Act, 2006 – Regulates misleading food labels and promotions.
• Cable Television Networks (Regulation) Act, 1995 – Disallows advertisements that are misleading or not in conformity with the Advertising Code.

Types of Misleading Advertisements

• Exaggerated Claims: E.g., fairness creams that claim to change skin tone in days.
• Fake Testimonials/Celebrity Endorsements: Endorsers promoting products without due diligence.
• Hidden Conditions: E.g., "Buy One Get One Free" offers with hidden costs.
• Surrogate Advertising: Advertising banned products (e.g., alcohol, tobacco) under the guise of soda, music CDs, etc.

Recent Examples in India

• Fairness Creams: Several brands have been pulled up for suggesting fairness equals success or confidence.
• Food Products: Brands have faced backlash for advertising instant noodles or snacks as healthy, contrary to nutritional data.
• OTT and Influencer Ads: With the rise of social media influencers, many product endorsements have been flagged for not disclosing promotional relationships or making unverifiable claims.

Recent Regulatory Developments

• ASCI Guidelines for Influencer Advertising in Digital Media (2021): Mandates clear disclosure (e.g., #ad, #sponsored) for all paid promotions.
• Guidelines for Prevention of Misleading Advertisements and Endorsements (2022) by CCPA: Strengthens the accountability of endorsers and advertisers.

Consumer Rights and Remedies

Consumers misled by advertisements can:

• File complaints with the CCPA or Consumer Commissions.
• Lodge a grievance through the ASCI online portal.
• Approach courts under the IPC in case of fraud.

Bharatiya Nyaya Sanhita (BNS)

The Indian Penal Code (IPC) has been officially replaced. On July 1, 2024, India enacted the Bharatiya Nyaya Sanhita (BNS), which supersedes the IPC of 1860. The new laws came into effect on July 1, 2024.​ Criminal cases registered before this date will continue under the provisions of the IPC, CrPC, and Evidence Act until their final disposal. In the Bharatiya Nyaya Sanhita (BNS), 2023, the provisions corresponding to the Indian Penal Code (IPC) sections on cheating (Section 415) and fraud (Section 420) are as follows:

Section 318 – Cheating

Section 318 of the BNS defines "cheating" similarly to the IPC, encompassing.

Deception: Inducing someone to deliver property, consent to its retention, or perform an act they wouldn't have otherwise done.

Harm: The act must cause or be likely to cause damage or harm to the person in body, mind, reputation, or property.

Punishments: Imprisonment up to 3 years, or a fine, or both.

If the offender knowingly causes wrongful loss to someone whose interests they are legally bound to protect, imprisonment up to 5 years, or a fine, or both.

If the deception involves delivering property, altering valuable securities, or similar acts, imprisonment up to 7 years, and a fine.

Section 319 – Cheating by Personation

Section 319 addresses "cheating by personation," where an individual deceives another by pretending to be someone else or misrepresenting themselves as someone they are not.

Punishment: Imprisonment up to 5 years, or a fine, or both

These provisions in the BNS align closely with the corresponding sections in the IPC, maintaining the legal framework to address and penalize deceptive practices effectively.

Conclusion

Misleading advertisements erode consumer trust and distort fair competition. While India has strengthened its regulatory framework, active enforcement and consumer awareness are crucial. Ethical advertising should be the cornerstone of brand communication — one that respects consumer rights and builds long-term credibility.