Government accepts consumer demands made through LocalCircles and issues draft advertising code of India
- • Consumers had raised strong concerns via LocalCircles about a series of misleading advertisements before and during the COVID-19 pandemic
- • 75% consumers had come across celebrity ads which were misleading
- • 80% consumers said ads should be regulated by a Government body instead of an industry body which does not have penal powers
- • Consumer had said with Consumer Protection Act 2019 notified now, an advertisement code must be developed and enforced to minimise such misleading ads
September 4, 2020, New Delhi: Companies spend millions of dollars in advertising every year to push product sales and building their brand image. But there is a fine line that separates good ads from misleading ads and unfortunately, many brands cross this line in pursuit of higher sales. During the last 8 months a series of advertisements were flagged by the consumers as misleading including products like mattresses, sanitizers, fabrics, readymade garments, juices, breads and even ice creams as immunity building for COVID-19 or fighting the COVID-19 virus.
Keeping the consumer demands in mind, the Department of Consumer Affairs on Sep 4th, 2020 released the draft of the ‘Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020’, to put a stop to the practice of misleading advertisements.
Consumers had reported frequent cases of content of ads being misleading and LocalCircles conducted an 8-poll survey to do a pulse check on the issue. The survey received more than 67,000 votes from 220+ districts of the country. LocalCircles had also shared the findings of this survey with leadership of the Department of Consumer Affairs requesting them to take immediate action.
First question asked consumers what is the level of trust they have in ads in print, TV, digital and other forms of media. Only 3% said they had a high level of trust while 25% said they had an average level trust in ads. 48% said low and 23% said they had zero trust in advertisements.
Only 28% consumers have trust in advertisements
Newspapers nowadays have many advertisements of products and services. Many consumers have said that they have believed some ads in the past and bought the product, only to have their trust broken as everything shown in the ad was not true.
When asked in which industry they find most frequent misleading ads, 22% said real estate, 14% said ecommerce sites/apps, 5% banking and financial services and 11% health products and services. 30% said cosmetic products and services while 15% said food products and supplements. 2% said others.
Consumers find most misleading advertisements in cosmetic products/services and real estate sector
Consumers said that travel industry is another area where the ads are quite misleading. Many tour operators quote a price of the tour in an ad to attract customers, only to later disclose that the price has many exclusions.
People were asked if, in the last 12 months, they had come across ads (print, TV or digital) that were vulgar in nature. 60% said yes and 29% said no.
60% consumers say in the last 12 months they have come across one or more vulgar advertisements
Be it condom ads during a cricket match or that ad of a deodorant which has a man surrounded by skimpily dressed females, Indians are struggling with vulgar ads especially with kids watching the broadcast too.
Surrogate advertising is a form of advertising which is used to promote products like cigarettes, tobacco and alcohol, in the guise of another product. People were asked if surrogate or substitute advertising should be permitted for products like liquor, cigarette and gutka, where direct advertising is banned. 76% said it should not be permitted while only 19% said it should be permitted.
76% consumers believe surrogate advertisements should not be permitted for products that are banned from being advertised
The Consumer Protection Act 2019 notified on July 20th, 2020 seeks to penalize misleading ads running on any medium, including television, radio, print, outdoor ads, e-commerce, etc. Manufacturers, service providers, and brand ambassadors found guilty will now face possible fines and jail terms for making misleading claims in ads.
The next question asked if in recent years people had come across advertisements by a celebrity which they later discovered to be false or misleading. 75% replied in a ‘yes’ while 11% said ‘no’.
75% consumers say they have come across a celebrity advertisement which they later discovered to be misleading or fake
Following question asked in recent years, what kind of losses have they or their family incurred as a result of relying on an advertisement which they later discovered to be misleading or false. 10% said they had incurred a financial loss while 21% said they have incurred both financial and health losses. Just 1% said they had incurred loss of health and 2% have incurred a loss of life. 10% said they have not incurred any loss and 53% said they don’t rely on advertisements.
Majority of the consumers who rely on advertisements have faced some kind of loss due to them
Currently, misleading ads are regulated through an industry body, ASCI, which in 2019 ordered a removal of 299 misleading ads. The final question asked consumers how can the regulation of misleading ads be made more effective. 11% said it is already effective and the current self-regulation system should continue while 80% said it should be regulated by a Government body instead. 3% respondents said advertisements should not be regulated at all.
80% consumers want regulation of misleading advertisements to be done by a Government body instead of an industry body
The Department of Consumer Affairs will now be directly regulating misleading advertisements through the Central Consumer Protection Authority, which also has the power to file Suo-moto class action suits against brands indulging in unfair trade practices and breaking consumer trust. As per the draft of the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020, brands will now be prohibited from using surrogate advertising to circumvent restrictions on ads of products like liquor and tobacco. It also sets guidelines for non-imitation of ads, comparative ads, bait advertising, and ads targeting children, amongst others.
Many consumers rely on advertisements to know about the new and existing products and services in the market, hence it is imperative that advertising is done responsibly.
67,000 responses were received from 220+ districts of India. 71% respondents were men while 29% respondents were women. 51% respondents were from tier 1, 34% from tier 2 and 15% respondents were from tier 3, 4 and rural districts. They survey was conducted via LocalCircles platform and all participants are validated citizens who had to be registered with LocalCircles to participate in this survey.