For overstating the benefits of its yoghurt, Dannon had to cough up $35 million. The Wrigley gum company had to shell out $6 million for falsely claiming that its Eclipse brand gum and mints were proven to kill germs that caused bad breath. Last year, Coca-Cola and partner Nestle were unable to substantiate claims that Enviga, the green tea energy drink, causes weight loss and had to agree to pay $650,000 and also to disclaim weight-loss benefits.
In India, consumers often read about such huge settlements being made abroad between consumers and companies. But rarely do they see anything of the sort closer home where they are bombarded day and night by ads that make true, semi-true or false claims with little accountability. Most successful consumer cases in court are about faulty appliances or defective or inadequate services. There aren’t many cases regarding misleading claims, which lead to large and exemplary settlements like in the developed world.
Though there is legal redress for misleading claims under the Consumer Protection Act 1986, people hesitate to approach consumer courts as the whole process takes too long. As per the Consumer Protection Act (1986), the time limit for disposal of a complaint is 90 days, and if product testing is involved, it is 150 days. “However, a recent study by Consumer Unity and Trust Society (CUTS) in Rajasthan showed that only 26 per cent of the cases were disposed of within the stipulated time period of 90-150 days. The delay could be up to 3-5 years or more due to various reasons in various consumer fora,” says George Cheriyan, Director, CUTS International. He also heads CUTS Centre for Consumer Action, Research & Training (CUTS CART).
“We correspond with the company and advise consumers to file a case in the consumer court. But we try to settle the matter out of court as the courts take too long,” says K C Chowdhury of Consumer VOICE, another consumer rights organisation supported by the ministry of consumer affairs. According to Choudhury, most manufacturers tend to make exaggerated claims about their products in advertisements, and the truth is usually just 20 per cent of the claim made.
Several consumer rights groups also approach the Advertising Standards Council of India (ASCI) regarding misleading advertisements. However, the ASCI usually takes three to four months to decide on the complaint. “The life of an ad is usually only about four months and so, by the time the decision is taken the ad is already off the air. Then, the ASCI ruling has absolutely no effect on the advertiser other than some amount of negative publicity if the matter gets reported in the media. Even then the benefits of having run the ads for over three to four months far outweigh this. And the damage done to the consumers by the misleading advertisement cannot be reversed and there is no provision here for compensation for affected consumers,” says Preeti Shah, editor of the magazine on consumer rights called Insight brought out by the Consumer Education and Research Council (CERC). Cherian agrees with Shah that the delay in deciding on a case of misleading ad means the damage will already be done. Moreover, ASCI, being a voluntary organisation guided by a code for self-regulation in advertising, does not have any legal powers. “It is not a government body and has no regulatory authority or framework. It is only now that the ASCI Code has been brought under the purview of the Cable Television Networks (Regulation) Act, 1995,” says Cherian.
Consumer groups resent the lack of transparency in the ASCI’s complaint redressal process as it provides no reason for rejecting a complaint and does not have any provision for a review of the decision. Often, rather than approaching ASCI, CERC writes directly to the company to try and sort out issues such as misleading claims or about products found to be harmful or unhealthy when tested in the CERC’s product testing lab.
“We need a separate authority to deal with these problems in a speedy manner. Already a case has been made for setting up a National Consumer Protection Authority (NCPA) to deal with misleading advertisements, mainly to bridge the legal gap to deal with unfair/restrictive trade practices following the proposed winding up of the Monopolies and Restrictive Trade Practices Commission (MRTPC). Unfortunately it has not taken off yet,” says Cherian.
Other than huge penalties, many countries take disciplinary measures against false ad claims such as corrective advertising. For instance, last year, in Australia, Coca-Cola ran “myth-busting” ads claiming that Coca-Cola did not make children fat, did not rot their teeth and was not packed with large amounts of caffeine. The Australian Competition and Consumer Commission (ACCC) came down hard on Coca-Cola and the company had to carry corrective advertisements titled “Setting the Record Straight” in over seven newspapers across the country. “Corrective advertising is a must to nullify the influence of misleading ads and a good deterrent. But so far, there is no such measure in India,” says Shah.
However, the CPA does suggest that in case of unfair trade practices, the court order for corrective advertisements to neutralise the effect of misleading advertisements at the cost of the party responsible for issuing the ad. “But, consumer courts neither have the power nor the infrastructure to investigate misleading advertisements or take up such cases suo moto. They can only take action on complaints filed before them. However, consumer forums can issue interim orders stopping such advertisements pending disposal of the case,” explains Cherian. Yet, for all these measures to stop misleading claims in ads, there is no dearth of ads continuing to do so with impunity and with little consequence.
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