What are the consequences for publishing or endorsing misleading advertisements?

The Consumer Protection Act, 2019 has recognized the making of a false or misleading advertisement prejudicial to the interest of consumers as a criminal offence and has made it punishable with imprisonment for up to two years and with fine upto ten lakh rupees; and with imprisonment for upto five years and with fine up to fifty lakh rupees for every subsequent offence.

In addition, or in substitution to that, the Central Consumer Protection Authority and the Consumer Commissions can take certain other actions.

The Central Consumer Protection Authority can:

  1. issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher to discontinue the advertisement or to modify the same.
  2. impose a penalty in respect of the false or misleading advertisement upto ten (10) lakh for first violation and upto fifty (50) lakh for every subsequent contravention.
  3. prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period upto one (1) year and upto three (3) years for subsequent contravention. However, the penalty cannot be imposed on the endorser if it is shown that the endorser has exercised due diligence to verify the veracity of the claims made in the advertisement.
  4. file complaint for prosecution for the criminal offence.

The Consumer Commission can direct the concerned party:

  1. to issue corrective advertisement to neutralise the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement; or
  2. to cease and desist from issuing any misleading advertisement.

 Relevant Legal Provisions:
  • Sections 21, 39 and 89 of the Consumer Protection Act, 2019

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