Misleading advertisment vs Smart consumers: Challange for the society

 

MISLEADING ADVERTISMENTS vs SMART CONSUMER:CHALLENGES FRO THE SOCIETY

ABSTRACT

“Jago grahak jago “

Advertising is important instruments form the present industries. As many companies and industries spend millions to the celebrities’ as it is an important source of income for their industries. These industries use branding images which acts as a unique, and eye catchy and easy to remember to the consumers so that their sales would be increased. The effect of advertisement upon the consumers’ decision is undeniable. The meaning of misleading advertisement is something which gives a false opinion regarding a product, and is regarded as unethical means of gaining profits. Misleading and false advertisement violates several rights of consumers like: right to information, right to choice, right to be protected against unsafe goods, and services as well as from unfair trade practices.

In the present era use of computers is excess in mode. The misleading advertisements in the World Wide Web is been checked by the network of consumer protection and health authorities. Advertising standard council of India (ASCI) regulates the advertisements in the television through self regulation codes, so that such misleading acts cannot be taken place, it has placed certain codes which have to be followed by the industries to make its advertisements. The efforts of ASCI are amenable but as it can’t act as sudo motu i.e. until a complaint is been launched it can’t take any action and hence the misleading advertisement are continuing. The Consumer Protection Act and the Monopolies and Restrictive Trade Practices Act which deals with the compensation to the consumers, both the laws define misleading advertisements as an unfair trade means. The telephone regulatory authority, insurance regulatory authority etc has also made rules to combat misleading advertisement.

The basic problem with these acts is the lack of individual enforcing agencies and broadcasting rules to regulate these deeds of the smart industrialist.

 

INTRODUCTION

A product is well known is the market through their advertisements made by the creative directors and the ad agencies in the different corners of market in India. The advertisement created by the creator has to keep in mind the particular quality, quantity and the price of the product. Advertisement of a product is a source of income to the producers and even acts as a source of information to the consumers. In the modern world advertising sexuality has been introduced to create hype in the mind of the consumers, and had played a predominant role in India. In the present era market the products are sold by simply associating model girls through their postures makes an impact and influences the human mind. Hence the legal control of misleading advertisements or false advertisement is must through the rights protected in the civil suits filed by the consumers, civil actions by the competitors with the help of criminal procedure where ever it is needed. The following paper focuses upon aspects of misleading advertisements, its impact upon the consumer and society and also regarding the judiciary and its rule with few suggestions as per the young citizens of this country.

1. CONCEPT OF CONSUMER:-

The consumer protection act of 1986 was enacted to provide a quicker and simpler to access to tackle the consumer grievances. This act for the first time introduced the concept of “consumer” and has also conferred expressed rights upon the consumer. The consumer protection act 1986 provides protection to the consumers from getting cheated or harassed by the suppliers or the producers present in the market. The act has provided machinery where the consumers can file their case and are entertained by the consumer forums with special powers so that the actions can be taken against the culprits and compensations are provided to the consumers. In the following tribunals the aggrieved party (consumers) are not necessarily be represented by the advocates as in other tribunals or in criminal courts.

The term consumer has been defined in the act as in section 2 (d) of the consumer protection act 1986 “consumer” means any person who :

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who ‘hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;

Explanation: – the term consumer in lay mans language the term consumer can be defined as a person who buys any good or service by giving consideration in the form of money that person can be called as a consumer, consumer can be a person or may be a group of people belonging to society.

1.1  CONSUMER OF GOODS:-

A person claiming himself as a consumer should satisfy the following conditions laid down in the provisions are as follows:-

(i) The goods are bought for consideration:- there should be a sale transaction between the seller and the buyer and the sale must be for goods and must be bought for a consideration. The definition of the terms like sale, goods and consideration is not been defined in the consumer protection act 1986 but are provided in the Sales and goods act 1930 and in the Indian contract act 1872.

(ii) Any person who uses the goods with approval of the buyer is a consumer:– when a person buys goods, they may not be for his own purpose but may be used by his family or friends etc. Anyone who is making use of that goods may come across any defects present in the product. The law construes the user of the product as an consumer, even though they may not be the buyer at the same time. In the above definition denotes that the user of the good should be rightful user.

(iii) Any person who obtains the goods for resale or for commercial purpose is not a consumer: – the term “resale” means the product is brought for the purpose of selling them again. When the goods or products are bought for the purpose of resell those kinds of buyers are not stated to be consumers as per the act.

(iv)Person buying for self-employment is a consumer:- when the goods or the products are bought for the commercial purpose the following criteria is to fulfilled:-

  • The goods are used by the buyer himself
  • When the goods are used for purpose of earning livelihood exclusively
  • The goods are used for self employment means only then this kind of use cannot be termed as use for commercial purpose under this act and the user are recognized as an consumer. It is an exceptional to the rules that the buyer of the good or products for commercial purpose hence is not a consumer as per the act.

The intention of the framers of this act to include this kind of proviso is to exclude business houses carrying business with profit from the preview of this act, and at the same time it is meant to save the interest of small consumers who buys goods for their self employment.

1.2  CONSUMER OF SERVICES:-

A person can be a consumer of services if the following conditions are been satisfied:-

(i) If the services are been hired or available :- the following term “ hired” has not been defined under the following act, the meaning stated in the dictionary is to procure the uses of services at a price or it also means “avail” or ‘use’.

(ii)Consideration must be payable or paid: – consideration is an important factor for hiring or using of the services. Hence the payment may be done either in installment form or an immediate form.

(iii) Beneficiary of the services: – the person who gets the benefits of the services is called the consumer.

2. DEFINATION OF MISLEADING OR FALSE ADVERTISMENTS:

Every person would be agreeing with this statement that advertisement is one of the sole way of promoting the product and to increase the market value of the company share. Advertisements make a great influence in the mind of the consumers. The term misleading or false advertisement can be stated as an advertisement which misrepresents the product in the eyes of the consumer. For example: – when an edible biscuits states that if you eat this you would look ever beautiful this is an misleading statement made by the producers to their respective consumers as it is not possible. Hence by this way an advertisement becomes a false or misleading advertisement. This kind of advertisement leads to violation of consumer rights like: right to information, right to select, right to be saved from unsafe products etc. Advertisement is no doubt a form of speech but its true character is reflected by the object for the promotion of which it is employed. It assumes the attributes and element of the activity under art 19 (1) which it seeks to aid by bringing it to the notice of a commercial advertisement which has an element of trade or commerce it no longer falls within the concept of freedom of speech for the object is not propagation of ideas- social, political or economic or furtherance of literature or human thought”[1].

2.1  PROBLEMS:-

The whole world market depends upon the consumer demands. As the producers has to put an active survey upon the needs of consumer, their preference regarding the product etc for the monetary gain of the producers. Regarding advertising a product the advertiser has to smart and wiser enough to select the mode of advertisement either through radio, television, newspaper or through internet. What an advertiser wants today about the product and what benefits will the consumer will get, these points are to be spelled out clearly[2].for example the statement of tide surf which removes dirt form clothes states that it also softens the hands of the user, this statement can be an attracting statement for the consumers but whether that assurance is meaningful or not is to be discovered by the consumer of that product itself. The basic problems are as follows:-

  • The nature, function, promise or assurance of advertising to a great number of people basically depends upon the characteristics of the economy and the society in which operates. In country like in India even after the development of the economic status, the real challenge is regarding the production of the product satisfying the need of the population.
  • Adequate information regarding its utility, quality, guarantee of product, and its price is one of the important basic character for which the certain product is produced for a certain commodity itself.
  • In the process of advertisement the use of difficult language or hyperbolic language cannot be used as a rule to boost up the sales of the product.
  • Use of different techniques as per the level of economic status of a country.

2.2EFFECT OF ADVERTISMENT IN THE SOCIETY:-

Indian society is places were the people are of different types belonging to different classes like: upper class, upper middle class, middle class and below middle class. Due to the presences of the different people from different social status the thinking of the mass differs. In the present era the advertisements are using celebrities and models to promote their product and to gain profits as it is a chief source of income. The basic problems related to advertisement in the society are as follows:-

  • The basic moral critics based upon the social stigma is upon the vulgarity and sexuality been shown the advertisements. Example: like ads of deodorants like axe or set wet, adds of condoms, ads of contraceptive pills etc.
  • The differences between the modern western world and the traditional Indian culture. As advertisements posters are present in the busy roads only not in the highways, for example:- This example is a case voice of IFCO V I.T.C.ltd [3] where the tribunal stated that the context is devoid of any social objectives and is solely designed to associate cigarette smoking with happily married lively, smart and good looking couples, the image creates an impression that smoking is good habit and it promotes the unique social events with the sole of promoting cigarettes in general and the brand Wills in particular. Hence this practice leads to injury to health for the consumers whether they are active or passive smokers and also an example for unfair trade practice, it is an violation of section 36A (3) (b) of regulation of production, supply and distribution act of 1975. The MRTP commission granted a temporary injunction and restrained the I.T.C ltd.
  • Promotion of drugs and medicines through advertising sexuality by associating model girls who by their postures tries to create an impact in the consumers mind. Drugs and Magic Remedies (objectionable advertisements) Act 1954 controls only certain advertisement of certain drugs under certain cases. This act prohibits those kinds of drugs which are related to the following concepts like:
    • Miscarriage or prevention of conception.
    • Increase in sexual pleasure.
    • Improving menstrual disorders in women
    • Or any other drug which may lead to harmful effects to women health.

The supreme court of India raised an objection to the following advertisement new life. New vigour, new spirit, new wave. If you want a cure, see today a well known world famous experienced registered physician. Special diseases such as oldness in youth, all sorts of defects in nerves, as weakness, laziness are treated with full responsibility, with new methods, new machines of science and electric treatment and are cured permanently. The supreme court held that the advertisement was for an prohibited drug which sale is not an interest of general public therefore it can’t be seen in the preview of freedom of speech and expression.[4]

  • False advertising lures the potential consumers away from the honest producers and injures the individual consumers by inducing transaction premised on inaccurate or false information.
  • It affects the general economic interest of the country and is antisocial in nature.

2.3 REMEDIES FOR MISLEADING ADVERTISMENTS:-

The remedies for misleading advertisements are under common law and it is of two types:-

  1. Civil suits by the consumers
  2. Civil actions by the competitors.
  • CIVIL SUITS BY THE CONSUMERS:-

Consumers who is been deceived by the misleading advertisements can file a case against the seller who may be responsible for propagation of the product in the market. In India it is very difficult to prove that the consumer has been a victim of the misleading advertisements. The consumers have to prove from his side that the product bought by him is an act done in the influence of false advertisements. Drugs and Magic (Objectionable Advertisements) Act 1954 cannot be much help unless and until the parliament of India enacts a comprehensive legislation dealing with complete aspect of misleading advertisements. The greatest problem in Indian economy is to prove the misleading advertisements is exaggeration in statements about the quality of the product which is the main concern. To file any case regarding misleading advertisements it has to be proved beyond any reasonable doubt. The consumer is entitled to bring an action against the producer in the court of law for breach of warranty; it can turn up into hostile if producer takes up the defense of privity.

  • CIVIL ACTIONS BY THE COMPETITORS:-

People make economics choices largely on the basis of information they get from others. Even if the prospective customer makes a personal investigation, he frequently lacks the knowledge necessary to appraise the merits of a product. Nor can many consumers personally scrutinize an organization’s business methods.[5] The competitors in the market also suffer some sort of loss and damage due to diversion of trade caused by unjustified claims of quality from the fellow competitors. The competitor has to prove beyond any doubt regarding its loss incurred due to its rival company’s advertisements and its false representation of the product. In India it is to be seen whether there is any statutory regulation regarding injury to trade caused by misrepresentation is actionable or not . in case of trade mark infringement, the effects of fraud on trade mark rights etc is been detail dealt in the Trade and Merchandise Marks act 1958 and can get the remedy under various proceedings.

 3.  REGULATIONS BY GOVERNMENT

[6]CONSUMER PROTECTION COUNCIL

3.1 THE CENTRAL CONSUMER PROTECTION COUNCIL:-

The central Government by notification establishes a council known as the Central Consumer protection Council (hereinafter referred to as the central government).It consists of the following members namely:-

(a)The Minister in charge of Consumer Affairs in the central government, who shall be its chairman.

(b)Such number of other official or non-official members representing such interest as may be prescribed.

Procedure for meeting of the central government

(1)The central council shall meet as and when necessary, but at least one meeting is necessary shall be held every year.

(2)The central council shall meet at such time and place as the chairman thinks to be fit and shall observe such procedure in regard to transaction of its business as may be prescribed.

Objects of the central council[7]The objects of the central council shall be to promote and protect the rights of the consumer   such as,-

a) The right to protect against marketing of goods and services which are hazardous to life and property

(b)The right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer against unfair trade practices;

(c)The right to be assured, wherever possible, access to a variety of goods and services at competitive prices:

(d) The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers

e) The right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums;

f) The right to consumer education.

3.2 THE STATE CONSUMER PROTECTION COUNCIL:-

The state by notification establish a council to be known as the consumer protection council for state (hereinafter referred to as the State Council),It consist of the following members namely:-

(a)The minister in charge of Consumer Affairs in the state government who shall be its chairman;

(b)Such number of other official or non-official members representing such interest as may be prescribed by state government

(c)Such number of other official or non-official members, not exceeding ten, as may be nominated by the central government.

(d)The state council shall meet as and when necessary but not less than two meetings shall be held every year.

(e)The state council shall meet at such time and place as the chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the state government.

Objects of the State council-The object of it is to promote and protect within state the rights of the consumers laid down in clauses (a) to (f) of section 6.

3.3[8]THE DISTRICT CONSUMER PROTECTION COUNCIL:The state government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council.

1) The district Consumer Protection Council (hereinafter referred to as the District council)shall consist of the following members namely:-

(a)The collector of the district (by whatever name called), who shall be its chairman; and

(b)Such number of other official and non-official member representing such interests as may be prescribed by the state government

2) The District council shall meet as and when necessary but not less than two meetings shall be held every year.

3) The district Council shall meet at such time and place within the district as the chairman may think fir and shall observe such procedure in regard to the transaction of its business as may be prescribed by the state government.

Objects of the District CouncilThe objects of every district council shall be to promote and protect within the district the rights of the consumer laid done in clauses (a) to (f) of section 6

3.4 CONSUMER DISPUTE REDRESSAL AGENCIES:-

Establishment of consumer Disputes Redressal Agencies –There shall be established for the purposes of this act, the following agencies, namely:-

(a) Consumer Disputes Redressal Forum to be known as the “District Forum “established by the state government in each district of the state by notification

(b)A consumer Disputes Redressal Commission to be known as the “State Commission” established by the state government by notification

(c) A National Consumer Disputes Redressal Commission established by central government by notification

3.5 [9]COMPOSITION OF DISTRICT COMMISSION:-

1) Each District Forum shall consist of,-

(a) A person who is, or has been, or is qualified to be a District Judge, who shall be its President

(b)Two other members, one of whom shall be a woman, who shall have the following qualification

i) Be not less than thirty five years of age

ii) Possess a bachelor’s degree from a recognized university

iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economic, accountancy, industry, public affairs or administration:

There a certain disqualification for the appointment as a member if he-

(a) Has been convicted and sentenced to imprisonment for an offence which, in the opinion of the state government involves moral turpitude; or

(b) Is an undercharged insolvent; or

(c) Is of unsound mind and stands so declared by a compete court;

(d) Has been removed or dismissed from the service of the government or a body corporate owned or controlled by the government.

3.6 [10]COMPOSITION OF STATE COMMISSION:

Each state commission shall consist of,-

a) A person who is, or has been a judge of the High court appointed by the State government who shall be its president

b) Not less than two, and not more than such number of members as may be prescribed, and one of whom shall be a women who shall have the following qualification

i) Be not less than thirty-five years of age;

ii) Possess a bachelor’s degree from a recognized university; and

iii) Be persons of ability, integrity and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy, industry.

3.7 [11]COMPOSITION OF NATIONAL COMMISSION:-

1) The national commission consist of,-

a) A person who is or has been a judge of Supreme Court, to be appointed by the central government, who shall be in President

b) Not less than four and not more than such number of members, as may be prescribed and one of them shall be a women ,who shall have certain qualification namely,

i) Be not less than thirty-five years of age

ii) Possess a Bachelor’s degree from a recognized university and

iii) Be a person of ability, integrity and standing and have adequate knowledge of at least ten years in dealing with problems relating to economics, law, commerce, industry, public affairs. Provided that not more than fifty percent of the members shall be from amongst persons having a judicial background.

4. LEGISLATIVE REGULATIONS:-

As India is a democratic country, It is true that the advertisements help the consumer by providing information which helps the consumer to take the decisions regarding the product. India is having very few regulations regarding false advertisements, due to its developing economy. The government has amended the MRTP (amended) Act 1984 and inserted articles 36A to 36E it does not deals with any kind of codes for advertiser or advertising. Due to absence of any regulations by government in India, the consumers are confronted with the worst effects of advertisements; hence it is necessary to have a consumer oriented approach to governmental regulations for changing the scenario of industrial scene in India.

Regarding to misleading advertisements in India the relevancy of The Combines Investigation Act (Canada) is subsequently relevant. The following act has two main sections which deals with the aspect of false advertisements are section 33C and 33D.

4.1 ADVERTISING STANDARD COUNCIL OF INDIA:-

An advertisement is a form of mass communication information to peruse the consumers. In the present the media is easily available in the homes of Indian families as per the survey conducted by the National Sample Survey Organization (Ministry of statistic program implementation) in the year 2005. The basic problem regarding the misleading or false advertisements is that it has to be found out by the consumer whether the statement made is an accurate statement or not till the person comes and launches the complaint the damage would be in its advance stage before the regulatory authorities takes any step. Due to this following nature of the unethical ads the advertisement standard council of India is creating a cell for self regulation among its members and staff so that the following kind of unethical ads can be controlled. The ASCI slogan is “Regulate yourself or someone else will” for developing self regulation. To combat the harm of false advertisements ASCI has laid down certain codes which are as follows:-

  • To ensure the truthfulness and honesty of the representations made by the producer .
  • To ensure the advertisements are not having any kind of offensiveness.
  • To safeguard social and moral ethics by banning against the indiscriminate use of advertisements for the promotion of products.
  • To ensure the fairness of competition in advertisements.

The ASCI gives two weeks time to the advertiser after receiving a complaint and then it is been sent to consumer complaint cell (CCC).ASCI is bound to follow the decision of consumer complaint cell. In the year of 2011-12 the ASCI has received almost 3000 (approx) complaints. The problem with ASCI is that it has to wait for the complaint to be filed by the consumer, as the system does not have a suo motu action nature. Hence the advertisements which do violate the codes of consumer act codes go unnoticed.

India has many laws for saving consumer rights but only two acts provides for the compensation scheme to the consumers and those are :- 1.consumer protection act

2. Monopolies and Restrictive Trade Practices Act

These are the laws which provide compensation for misleading advertisements as in both the above acts misleading advertisements are defined as unethical trade practices.

4.2 CABLE TELEVISION NETWORK REGULATION ACT:-

This act makes it mandatory that all the advertisements transmitted through the cable television should adhere to the regulation codes provided in the “cable television network regulation act.”

The following code can be executed by an authorized officer like- district magistrate or sub- divisional magistrate or commissioner of police or any other officer notified by the state and central government can take action against those who violates the advertising codes stated in it. The basic problem with this act is the enforcing authority; the following act does not have an independent regulator like broadcasting regulator in other countries like Australia where the broadcasting authority takes action for violation of norms of codes regarding advertisements.

5 GUIDELINES TO CURB MISLEADING ADVERTISEMENT:-

[12]It is necessary to device a set of effective sanctions to curb deceptive or unfair process and to evolve correct advertising guidelines. There are certain guidelines to curb misleading advertisements which are as follows:

(1)If deceptive statement is responsible for creating and reinforcing in the mind of the consumer a false and material belief even if that false advertising ceased to exist. The ill-effects of advertising will need to prove that an advertiser was false, misleading and deceptive in material respect.

(2) Large numbers of purchasers are exposed to the advertiser and are influenced by fraud. The consumer’s misguided belief should not be responsible for the ill-effects of the advertisement. Any proposed law on the subject in India must take into consideration of a material fraud or deception with respect of a measure in advertising.

(3) The impact of fraud should be on a substantial number of consumers. Misconception about the product must be consistent with the theme of fraud. The corrective advertising must be consistent with the approach of the society and the government must visualize in context of India’s developing economy.

(4) The advertising regulations must ensure higher level of consumer welfare. There should be a legitimate room for government to play in regulating in advertisement to introduce standard of fairness and truth in advertising in order to create market incentives.

6 CONSUMER-ORIENTED CONTROL OF ADVERTISING:-

[13]In the absence of adequate production information and effective system for providing effective truthful, relevant and adequate advertising the consumer groups which implies urgent need for governmental regulation of advertising process .The situation in India as regard to government regulation is very much different from other countries as there is absence of statistics and relevant data nothing can be said as to how far government has been able to regulate false, unfair and misleading advertising detrimental to the interest of the consumers at large .If the government regulation of advertising is active then it accentuates the manufacturers and producers to adopt self-regulation. Advertising is generally useful in sense that it saves the cost of the consumer for searching the right product at right place and for this consumer is required to pay the cost of advertising, through the purchase of the product indirectly.

7 CONCLUSIONS:-

The government regulations are inactive in India. It is necessary to have a National Advertising Review Board and it should be a joint creation of the advertising industry and the government for regulating healthy and growth-oriented advertising process in the country. This kind of beginning must be made in India if the Bad effects of advertising to be checked in the interests of the vast population of consumers in India. This board will make serious efforts to check irrational approach in the advertising process and would suggest better methods of advertising where the innocent consumers will be benefited and may help in the growth of commerce and industry in the country. In every advanced country of the world, the innocent consumers are essential part of the free, fair and efficient functioning of a free market. Packages and labels must enable the consumers to obtain accurate information with regard to quality and quantity of the product then it will be easy for the consumers to value the product in appropriate and efficient manner. Therefore, the government must come forward in regulating advertising process to achieve highest goal in the marketing of consumer goods in a developed country like India.

 

SUBMITTED BY:-

Upadhyayula Himajyothsna (B.Sc.LLB) and Subuhi (BA.LLB)

KIIT School of Law, Bhubaneswar



[1] AIR 1960 S.C 554 AT 563

[2] D.M.Oglivy, Confession of An Advertising Man 93 (1963)

[3] Voice of ifco V I.T.C.Ltd ,Calcutta,MRTP commission order 1 at 14 (27th November, 1984)

[4] Zaffar Mohammad v State of West Bengal ( AIR 1876 S.C. 171)

[5] The law of commercial disparagement: business defamations impotent ally , 63 yale L.J. 65 (1953)

[6] Consumer protection law , case digest , by cch india (wolters kluwer business, pg-1157

[7] Supra, pg – 1158

[8] Supra, pg- 1159

[9] Supra, pg- 1160

[10] Supra, pg 1168

[11] Supra, pg- 1173

[12]Consumer protection law in India,An Eco-Legal Treatise on Consumer Justice,Indian Law Institute,Rajendra Kumar Nayak,pg-193

[13] Supra

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