2 in 3 Indian consumers have come across 3 or more misleading advertisements during the COVID pandemic; say regulation of it is absolutely ineffective

June 3, 2022, New Delhi: Throughout history, commercial advertisement has been used as an important tool to promote products or services and reach as many citizens as possible. Consumers witnessed a change in advertisements during the pandemic. In 2020, advertisements for hand sanitizers grew 100% on television, while advertisements for personal care and hygiene products constituted 20% of overall television advertisements according to a report on TV advertising by TAM Media Research. However, consumers started to complain that while some of these products were genuinely useful, many brands falsely promoted the COVID cure or immunity from it.

According to an online portal, Grievances Against Misleading Advertisements (gama.gov.in), which is run by the Department of Consumers Affairs, over 6000 complaints of misleading advertisements were received by the platform from 2019 to 2021. Also, the self-regulation industry body, Advertising Standards Council of India (ASCI) found out that over 300 advertisements in 2020-22 made were untested claims related to COVID-19. Only 12 such COVID-19 ads were found to be scientifically correct during the period. Consumers have been complaining that in many instances even celebrities and influencers, knowingly or unknowingly, are seen making unsubstantiated claims such products. Recently, the CCPA ordered the discontinuation of Sensodyne advertisements in the country for defying norms, as the ads showed dentists practicing outside India endorsing the products. It also asked Naaptol Online Shopping Ltd to discontinue misleading advertisements, while imposing a penalty of INR 10 lakh after 399 complaints were registered against the brand.

In India, consumers can lodge complaints at the GAMA portal relating to a misleading advertisement seen across any media, including digital platforms, which then gets forwarded to ASCI who then issues advisories to the companies. However, consumers have expressed concerns about resolution and the scope of companies covered under ASCI. In addition to national brands, consumers report that a large number of regional and local brands, businesses, and service providers make misleading claims regularly through local advertising in newspapers, hoardings, Whatsapp messages, etc. where there is literally zero redressal. In 2020, after the Consumer Protection Act, 2019 was brought into effect, the Government of India formed Central Consumer Protection Authority (CCPA) under the act, which has the authority to regulate matters (investigate and enforce, recall, refund and/or return of products) with regards to violation of consumer rights, unfair trade practices, and false or misleading advertisements. The CCPA is now authorised to issue orders where misleading ads can call for penal action, with punishment ranging from a fine up to INR 10 lakhs to imprisonment for up to 2 years.

Misleading advertisements, however, continue to be a key area of consumer concern in India and consumers via LocalCircles in September 2020 had demanded that the Government should bring out an advertisement code and regulate the same. Another previous survey by LocalCircles revealed that 80% of consumers want regulation of misleading advertisements to be done by a government body instead of an industry body. LocalCircles has also conducted an extensive survey on cryptocurrency ads, which revealed that 74% of Indians as saying that cryptocurrency advertisements do not highlight the risks involved in an effective manner.

While the CCPA has been taking some suo moto action against misleading ads, LocalCircles has conducted another survey to gauge consumer pulse on misleading ads and their regulation. The survey has tried to understand the number of times Indian consumers came across a misleading advertisement in the last 24 months or since the COVID pandemic began. It then attempted to understand if any consumers bought products or services after watching the ad only to find later that they were misled. Also taking cognisance of redressal bodies that are there to act against misleading ads, the survey sought consumers’ pulse if such mechanism has been effective. The survey received more than 33,500 responses from consumers residing in 312 districts of India. 67% respondents were men while 33% respondents were women. 43% respondents were from tier 1, 31% from tier 2 and 26% respondents were from tier 3, 4 and rural districts.

70% Indian consumers say they have come across 3 or more misleading advertisements in the last 24 months of the COVID pandemic

The first question in the survey asked Indian consumers how many misleading advertisements they had come across in the last 24 months of the Covid pandemic. In response, 8% of consumers said they’ve come across “1-2” misleading ads in the last 24 months. 17% said “3-5” of such ads, 19% said “6-9”, 34% said “10 or more”. Only 5% of consumers surveyed said they haven’t come across any misleading ads, while 17% couldn’t say. On an aggregate basis, 70% of Indian consumers surveyed say they have come across 3 or more misleading advertisements in the last 24 months of the COVID pandemic. This question in the survey received 11,718 responses.

42% Indian consumers accept that they bought food/herb/nutraceutical products during the COVID pandemic because the advertisement/brand claimed that it was immunity boosting

The following question in the survey asked Indian consumers about the food items they or someone in the immediate family started buying or consuming regularly since the COVID pandemic started because the advertisement/brand claimed to be “immunity-boosting foods, herbs or nutraceuticals”. In response, 16% of consumers said they bought “1-2” food items, 8% said “3-5”, another 8% said “6-9”, and 10% said “10 or more”. The majority of 55% of consumers surveyed said they did not buy any of those items, while 3% couldn’t say. On an aggregate basis, 42% of Indian consumers accept that they bought food/herb/nutraceutical products during the COVID pandemic because the advertisement/brand claimed that it was immunity-boosting. This question in the survey received 11,246 responses.

47% Indian consumers accept that they bought products or services in the last 24 months based on an advertisement only to find later that they were misled

Similarly, the next question in the survey asked Indian consumers if they were misled by an advertisement to buy non-food products and services in the last 24 months. In response, 15% of consumers said they bought “1-2” times, 11% bought “3-5” times, 8% said “6-9”, and 13% said they bought “10 or more” of such non-food products. The majority of 48% of consumers surveyed said they bought “none”, while 5% couldn’t say. On an aggregate basis, 47% of Indian consumers accept that they bought products or services in the last 24 months based on an advertisement only to find later that they were misled. This question in the survey received 10,643 responses.

67% Indian consumers say the current mechanism of booking brands for misleading advertisements is absolutely ineffective

The following question in the survey asked Indian consumers if the current mechanism of booking brands responsible for misleading advertisements is effective. In response, the majority of 67% of consumers say that it is “absolutely ineffectively”. 13% said it is “partially effective”, and 8% said it’s “quite effective”. 12% of consumers did not have an opinion. On an aggregate basis, 67% of Indian consumers say the current mechanism of booking brands for misleading advertisements is absolutely ineffective. This question in the survey received 9,382 responses.

In summary, the survey findings indicate that 70% or over 2 in 3 Indian consumers surveyed have come across 3 or more misleading advertisements in the last 24 months of the COVID pandemic. Advertisements claiming protection or immunity from COVID by certain brands have clearly led to increased interest from the consumers. This is confirmed by the survey as 42% of consumers bought food/herb/nutraceutical products during the COVID pandemic because the advertisement/brand claimed that it was immunity-boosting, while 47% bought non-food products or services in the last 24 months based on an advertisement only to find later that they were misled. Although there are various redressal mechanisms to report about such misleading advertisements, 67% of Indian consumers say the current mechanism of booking brands for misleading advertisements is absolutely ineffective.

In India, implementation and enforcement are key to the success of an act and the same is the need of the hour here. The Central Consumer Protection Act has made a good beginning with action against misleading ads by Sensodyne and Naaptol. The need of the hour is for CCPA to make complaint submission easier, and in many cases, where a large number of consumers raise objections against certain advertisements for being misleading, take suo moto action. Also, the advertising code of the Government has been long pending and must be released at the earliest. Also, there is the need to define a mechanism where swift actions can also be taken against misleading ads at regional and local levels. Once a series of penal actions are taken against the errant advertisers, the message will spread and will lead to a reduction in misleading advertising in India.

LocalCircles will share the findings of this report with the Department of Consumer Affairs so the collective consumer inputs can be reviewed for immediate policy and regulatory actions by the CCPA.