Celebrities face up to 3-year ban, heavy penalty for misleading ads in new Consumer Protection Bill

The new Consumer Protection Bill is no good news for celebrities -- they will be made accountable for misleading ads and will have to pay dearly for the offence.  

The Consumer Protection Bill, 2018 proposes that the celebrities endorsing misleading ads should be made to pay penalty up to Rs 50 lakh and serve a ban from making an endorsement of any product or service of up to three years. However, the bill did not include an earlier recommendation by a Parliamentary Standing Committee to impose jail term for deceptive endorsements.

The bill, which seeks to replace the 31-year-old law in force now, was introduced by Consumer Affairs Minister Ram Vilas Paswan in the Lok Sabha.

The bill is awaiting clearance by Parliament. The main thrust of the new Consumer Protection Bill is to eliminate the false and misleading advertisements. A Central Consumer Protection Authority (CCPA) is also proposed in the bill.  

If it is clear to the CCPA that a particular advertisement is false or misleading, the authority may issue directions to endorsers, advertiser, publisher and traders and manufacturers to stop or make changes. Also the CCPA have the right to impose a penalty of up to Rs 1 million on endorsers and manufacturers. If subsequent violation happens penalty will be of up to Rs 5 million.

The authority will also have the power to ban endorser of false or misleading ads from making an endorsement of any product or service for a period of one year, the subsequent violation will attract a ban of up to three years.

"No endorser shall be liable to a penalty if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him," the bill said, reports PTI.

The Parliamentary Standing Committee that reviews the Consumer Protection Bill, 2015, had suggested strict penalty and jail term for endorsers of misleading ads. Although, the government did not accept the recommendation of jail term and has instead proposed ban of up to three years. In case of those publishing misleading ads, the Bill empowers CCPA to slap a penalty of up to Rs 1 million. Although, no penalty will be levied if publishers prove that the ad was published in the ordinary course of their business.

"No defence shall be available to such person if he had previous knowledge of the order passed by the CCPA for withdrawal of or modification of such advertisement," the bill said.