Misleading ads? Celebrities may face penalty or jail term

Some celebrities have come under fire for endorsing brands misleading consumers.

A Parliamentary Standing Committee on Tuesday recommended stringent provisions including jail term up to five years and hefty penalty of up to Rs 50 lakh in order to protect consumer interest.

In its report on the Consumer Protection Bill 2015, tabled in Parliament on Tuesday, the panel has suggested legal teeth to advertising watchdog ASCI to curb misleading ads besides proposing severe penalties, jail and cancellation of license of those involved in food adulteration.

Moreover, the committee - headed by Telugu Desam Party MP J C Divakar Reddy, advocated that the Department of Consumer Affairs should be empowered to make laws to regulate growing sectors of e-commerce, direct selling and multi-level marketing where consumer complaints are on the rise.

The government introduced the Consumer Protection Bill 2015 in the Lok Sabha in August last year to repeal the 30-year old Consumer Protection Act. The panel's report will be studied before final passage of the bill in Parliament.

"The committee strongly feels that misrepresentation of a product especially of food product should be taken very seriously considering the influence of celebrities and high networth individuals and companies. The existing laws are not deterrent enough to discourage manufacturers or publishers from using such personalities for misleading ads," the panel on Consumer Affairs said in its report.

The Committee, therefore, recommends that stringent provisions may be made in the bill to tackle misleading advertisement, as well as, to fix liability on endorsers/celebrities, it said.

"The committee recommends that for first time offence, the offender may be penalised with either a fine of Rs 10 lakh or imprisonment up to two years or both. For second time offence, a fine of Rs 50 lakh and imprisonment of five years.

For subsequent offences, the penalties may be increased proportionately based on the value of sales volumes of such products or services," the report added.

Some celebrities have come under fire for endorsing brands misleading consumers. Recently, Indian cricket captain M S Dhoni had to resign as brand ambassador of Amrapali after residents of a housing society started a protest against the builder and the cricketer on social media.