Government norms have been strengthened for endorsers, including celebrities and athletes, as they are now required to disclose material connections and conduct due diligence when endorsing in advertisements.
In accordance with the new guidelines established by the Ministry of Consumer Affairs on Friday, endorsements must reflect the endorsers' honest opinions, beliefs, or experiences.
The Consumer Protection Act (CPA), 2019 stipulates that endorsers must disclose material connections; failure to do so carries a penalty.
Material disclosures are relationships that influence the weight or credibility of an endorsement in a manner that a reasonable consumer would not anticipate.
The guidelines said that,
"If there exists a connection between the endorser and the trader, manufacturer or advertiser of the endorsed product that might materially affect the value or credibility of the endorsement and the connection is not reasonably expected by the audience, such connection shall be fully disclosed in making the endorsement."
Under the Consumer Protection Act, violation of these standards would result in a penalty of Rs 10 lakh for the first offence and Rs 50 lakh for subsequent offences.
To prevent misleading advertisements, the new guidelines titled "Prevention of misleading advertisements and necessary due diligence for endorsement of advertisements" went into effect on June 10, 2022.
It clarifies bait advertisements, surrogate advertisements, and free-claims advertisements, as well as provides criteria for an advertisement to be considered genuine and non-misleading.