New Delhi: The Consumer Protection Bill, 2019 was passed in the Lok Sabha on Tuesday. The Bill seeks to strengthen the rights of consumers and provides a mechanism for redressal of complaints regarding defects in goods and deficiency in services.
According to the Bill, endorsers and manufactures can face jail term up to five years and a fine of up to Rs 50 lakh for misleading advertisements.
The Consumer Protection Bill, 2019 seeks to penalise misleading advertisements placed on virtually any medium, including television, radio, print, outdoor ads, e-commerce, direct selling and telemarketing.
The bill, introduced in the Lok Sabha on 8 July and is not yet law, plugs a yawning gap in the advertising industry, monitored by the self-regulatory watchdog Advertising Standards Council of India (ASCI).
Under the bill, a misleading advertisement is defined as promotions across platforms that “falsely describes a product or service; or gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice or deliberately conceals important information".
A Central Consumer Protection Authority, headed by a government-appointed chief commissioner, will be set up in Delhi to regulate matters relating to the violation of consumer rights, unfair trade practices and false or misleading advertisements.
Guilty manufacturers and service providers face jail terms of a maximum of two years, along with fines of up to Rs 10 lakh.
Celebrities endorsing misleading advertisements can be fined up to Rs 10 lakh.
For repeat offences, the authority can impose a fine of up to Rs 50 lakh and a jail term of up to five years. It can also bar a celebrity from endorsing advertisements for up to a year, extending it to three years for repeat offenders.
Endorsers won’t be liable if they can prove that they have done due diligence to verify claims made in the ads.
The authority will only penalise manufacturers or endorsers if they fail to discontinue the false advertisements or to modify them.
The Bill was introduced in the Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan.
The bill defines a consumer as a person who buys any good or avails a service for a consideration. It does not include a person who obtains a good for resale or a good or service for commercial purpose. It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
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