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Advertising is an important aid for today’s modern market system as numbers of products are launched daily. New products and services make our lives easy and comfortable. The advertisement has deep impact in the mind of customers, whenever they think about the product their mind directly sends them to the advertisement of that product as these advertisements are repeated many times in a day. Every day, we are exposed to an endless series of advertisements, which encourage us to purchase different products. There is no controversy over the fact that advertisement is the main source of information, but in most cases, it misrepresent the nature of the product by using false testimonials, inserting the word ‘guarantee’ where nothing is guaranteed, quoting misleading prices, concealing defects in a product and misleadingly disparaging competitors’ offerings. All these acts violate the consumers’ right ‘to be informed’, and hence, these are unethical. There are different laws which from false and misleading advertisements and regulatory machinery is also existing in different spheres of commercial activity like Advertising Standards Council of India (ASCI), Press Council of India for newspaper, the Telecom Regulatory Authority India for television advertisements, Securities and Exchange Board of India (SEBI) for stock exchange and the Food Safety and Standards Authority of India for food related advertisements etc. to control these misleading advertisements. However, it is felt that there is no stable and proper relief to the customers that can be relied upon for protection in case of deception

The proposed study is aimed at deep review of the existing literature on the subject. Several books, encyclopedias, journals, newspapers, magazines, reports, projects and websites are consulted. Some of the important books and articles relating to this subject are mentioned here:

The book titled Advertising Management: Theory and Practice[1] is written by Mahendra Kumar Padhy a broad text that features the many complexities facing advertisers in India. The author provides the sound background for learning the core of advertising and marketing mix at play in this country. The Advertising, New Concepts[2] by S.S.Kaptan introduces fundamental concepts of advertising and the major players in Indian market. It provides comprehensive material on numerous issues relating to Indian advertising which affected the society. C.L.Tyagi and Arun Kumar are the authors of Advertising Management[3] and they explore advertising and sales promotion, economic and social effectiveness of advertising decisions and plans. The book is written in simple and conversational language. Different topics are discussed like advertising, functions and classification of advertising, economic, social and ethical aspects of advertising, media planning of media scheduling etc. Anjali Y. Chaudhari under the book The Impact of Television Advertising on Children[4] focuses on the potential of advertising in shaping the consciousness of individuals. The author reveals how these television advertisements effect on the mind of the children directly or indirectly. The book Consumer Protection and Advertisement Laws[5] by Manoj Kumar Padhy and B.C.Nirmal have great contribution in literature and information on consumer protection. The book reflects the uncertainty on advertising and its effect on society in general and consumers in particular.

Definitions

The Consumer Protection Act, 2019 under section 2(28) defines ‘misleading advertisement’. It provides “when the advertisement falsely describe any products or services, give the false guarantee about the nature, substances, quality and quantity of the products etc. and lastly it conceal the important information which is necessary to explain about the products and services is called the misleading advertisement”.^[1]

According to Aaker, “Deception occurs when an advertisement is the input into the perceptual process (a) differs from the realty of the situation and (b) affects buying behavior to the detriment of the consumer.” Aaker’s definition confirms the present theory by noting that deceptive or misleading advertising messages affect one’s beliefs and attitudes which in turn, affects one’s buying behavior.^[2]

 Functions of Advertisements

The main function of advertising is to introduce new goods and services in the market for the purpose of increasing their demand. The advertisement creates the positive attitude of the public towards the new product or existing products. Effective advertisements can influence the customer in such a way that they buy the advertised product without a second thought.

The effective advertisement is very important for the sale and growth of the products, services and ideas. The basic function of advertisement is to inform about the new products. The second function of advertisement is to generate demand about any specific product or service. Thirdly, it influences the purchasing habits of customers. Fourthly, it clearly boosts the economic growth of the country by providing employment opportunities to professionals from different sectors. Fifthly, an advertisement creates the brand name which is goodwill of the company and lastly, advertisements increase the standards of life of people by giving them information about the latest goods and services.

 Meaning of False, Misleading and Deceptive Advertisements

Advertising is a very important part for growth and progress of any business. In recent years the false and misleading advertisements have increased which has shaken the confidence of customers. There are many laws and regulatory bodies to monitor these kinds of advertisements.  In this paper an endeavor has been made to study different types of false and misleading advertisements.

1. False and Misleading Advertisements

The advertisements which are not providing true and actual information about any product, service and idea is said to be false and misleading. In the advertisement of a product the information should be true regarding the manufacturing, use, weight, ingredients, price and side effects of the product.

In the case of  Dabur India V. Colortek Meghalaya Pvt. Ltd. ^[3] the Supreme Court observed that the advertisements fall in the freedom of speech and expression as enshrined in article 19(1)(a) of the Constitution of India in however, it must not be false and misleading. Misleading advertisements are detrimental not only for the individual consumer but for the society at large.

There are several types of false and misleading advertising tactics used by companies to lure unsuspecting consumers. Some of these tactics include:

(i) Puffery and Excessive Representation

Puffery is an example of excessive representation, it means “a statement or representation expressed in vaguer, laud and exaggerated claim”. Puffery is the over-exaggeration and overstatement of claims in advertising. Sometimes these claims can be disguised as factual information, which of course then makes the advertisement deceptive.^[4].

Under Reckitt Benckiser (India) Pvt. Ltd V. Gillete India Ltd^[5] the court has defined puffery as “the act or practice of puffing or fulsome public praise or commendation”. In the advertisement it was shown that use of VEET, the hair removing cream would make skin twice time smoother than use of razor which results in stubble hair. This comes in the category of excessive representation of product however, the court said that puffery is permissible to certain limits.

(ii) False Claims or Promises

When advertisements are making false claims and promises it affects the consumers directly. Making an advertising promise that cannot be kept, such as “restores youth” or “prevent cancer”. When Listerine claimed to prevent or reduce the impact of colds and sore throats, the authority banned the campaign and required the company to run millions of dollars’ worth of corrective advertisements.^[6]

(iii) False Testimonials and Mock-ups

Testimonial is a statement given by a popular personality or any other person claiming the superiority of the brand. In fact, many advertisers pay handsome amounts of money to extract the statement from a personality even though he/she may not be a user of the product. Take the examples of advertisements of soaps, cosmetics, food products etc. you will come across a personality praising the product so much, but in reality she/he must not have used the product at all.^[7]

In The Manager Director Hindustan Lever Limited V. S.T.Rajan.^[8] The complainant purchased “Fair & Lovely” cream for fair complexion and used the same for 6 weeks as advertised.  No such effect and improvement in the skin was noticed as represented through the advertisement released. The complainant claimed compensation for unfair trade practice under section 2(1) (r) of the Consumer Protection Act, 1986 and was allowed in the lower forum. The statement made in the advertisement amounted to guarantee and representation about quality and standard of the product. Appeal preferred by the manufacturer was dismissed and confirmed the order of the lower forum was confirmed.^[9]

(iv)   Small – Print Qualifications

Many local retailers are faulted for misleading advertising, particularly regarding small-print disclosures for high-ticket items such as cars and appliances. Often, retail advertisers will offer very low down payment prices for high-ticket items, yet will have high-interest terms, which are only disclosed in small print at the end of a commercial or print advertisement. Consumers often overlook such information, may be misled by the low down payment message, and may suffer material harm when they agree to expensive repayment programs.^[10]

In M. Siddalingappa V. T. Nataraj^[11], the laundry receipt contained a condition that only 8 per cent of the cost of a garment would be payable in case of loss. The condition was held to be unreasonable and full value was required to be paid to the owner of the garment.^[12]

2. Unfair Trade Practices

The Consumer Protection Act, 2019 (CPA), contain guidelines for the prevention of deceptive advertisements. The Act defines Unfair Trade Practice under section 2(47). It says that “any trade practice for the purpose of sale, use and supply of products adopting any unfair method or deceptive practice like making any statement which is falsely representing that goods are of good standard, quality, quantity, style or model etc. and make falsely represents any rebuilt, second hand, renovated or old goods as new goods, or misrepresenting a goods or services have sponsorship, approval, performance uses or benefits etc. or give false guarantee or warranty about the performance or life of product etc”.^[13]

The unfair trade practices may lead to the following:-

(i) Overspending and Unnecessary Expenditure

The main function of advertisement is to introduce new products and inform how to use existing products in a new way. But today’s commercials are not merely informative but may also create artificial needs for the customers. The companies are offering maximum discounts, buy one and get one and other free offers. They are hiring celebrities for advertisements to convince consumers. As a result the customers are convinced to buy those products which they actually as not require.

(ii) Unfair Competitions

A healthy competition between companies is a good sign of growth and development of the society.  However, advertisements may foster unfair competitions among producing houses in order to gain more market for their product or service. Thus, a small company may become the victim of unfair competition.

The Competition Act, 2002 does not provide any direct relief to the consumer but section 3 regulate conditions where no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India or they entered any agreement contravention of the provisions shall be void.[14] Section 4 said that no enterprise abuse its dominant position by imposing any unfair and discriminatory conditions in purchase or sale of goods etc. In Jupiter Gaming Solutions Private Lt. V. Government of Goa & Ors.^[15] The court held that “the provisions of section 4 of the Competition Act, 2002 mandate the Commission to inquire into the cases where dominant players may restrict competition in the market by way of denial of market access and by imposing unfair and discriminatory conditions.^[16]

(iii) Unreasonable Comparisons

The comparative advertisements are some kind of references of a product or service which is compared with other product or service of another company. The nature of these advertisements is measuring other companies’ product in their advertisements.

In Colgate Palmolive (India) Ltd. V. Hindustan Unilever Ltd.^[17] Hindustan Unilever Limited (HUL) had launched its Pepsodent Germicheck’s advertisement which compared the toothpaste’s germs attack power with Colgate Strong Teeth claiming that Pepsodent Germicheck has “130% superior” germs attack power over Colgate Strong Teeth after four hours of brushing. Colgate filed a suit against HUL for interim injunction. Two cases such as Dabur India Ltd. V. Colortek Meghalaya Pvt. Ltd.^[18] and Reckitt and Colman of India Ltd V. M.P.Ramchandran and Anr.^[19] were referred under this case and court dismissed the present case by saying that “Hindustan Unilever Limited was not denigrating the product of Colgate. The comparative advertising is permissible as long as the competitor’s product is not derogated and disgraced while comparing”.

3. Deceptive and Fraudulent Advertisements

Deception exists when an advertisement is introduced to the people in such a way that the output of that advertisement differs from the reality of the situation. It may be of different forms and types. Like if it violates consumers’ right to information; violates consumers right to choice; harmful to the children and health of the common people; destroy the lives of students through false advertisement.^[20]

In the Carlill V. Carbolic Smoke Ball Co.^[21] the company offered the public at large to buy their product “smoke ball” and claimed that after using this product the person will never contact influenza. Mrs. Carlill bought and used smoke ball and got influenza. The court held that “the company is liable for deceptive and fraudulent advertisement”.

There are some examples of deceptive and fraudulent advertisements:-

(i) Palming Off (Passing Off)

Passing off occurs when the firm uses another’s famous trade name or trademark to promote noncompeting goods and thereby potentially confuses consumers about the true origin of the goods. Right of publicity is the exclusive right to exploit commercially one’s name or likeness. Typically, these cases involve unauthorized attempts to use sports or entertainment celebrity’s name or likeness for commercial gain.^[22]

(ii) Free Gifts, Discounts and Contests

The free offers in advertisements always attract the customers. Many a times these gifts and offers are given with the intention to clear the defective and old stock.

(iii) Fake Guarantee and Warranty

Advertising of guarantees and warranties shall be explicit, with sufficient information to apprise consumers of their principal terms and limitations or, when space or time restrictions preclude such disclosures, the advertisement shall clearly reveal where the full text of the guarantee or warranty can be examined before purchase.^[23]

Under section 14 of the Sale of Goods Act, 1930 the parties to the contract of sale may put terms regarding, the time, place, quality, quantity, delivery of goods, payment of price etc. These stipulations and terms may be of two types conditions or warranties. The ‘condition’ as per section 12 of the Sale of the Goods Act, 1930 is a stipulation essential to the main purpose of the contract, whereas ‘warranty’ under section 13 of the Sale of Goods Act, 1930 is a stipulation collateral to the main purpose of the contract of sale. In the absence of any stipulation in the contract of the Sale of Goods Act, 1930 lays down some terms as implied conditions and implied warranties under section 14 and section 16 of the Sale of Goods Act have also been included.

(iv) False Demonstrations and Samplings

Both false demonstration and sampling may be the part of the deceptive and fraudulent advertisements. Some companies may at times send true product in demonstration and sample however, the real products when ready for sale are of inferior quality which again misleads the customers.

4. Illegal Advertisements

The illegal advertisements tend to injure the morality or are against the public policy. Following are some examples of illegal advertisements:

(i) Advertisements Hurting Religious Sentiments

The Indian Constitution guarantees freedom of religion^[24] to all the citizens but reasonable restriction can be placed on the ground of public morality and health. Advertisement should not contain an explicit preference, limitation, or discrimination on account of religion (e.g., no Jews, Christian home).^[25] Advertisement based on religion or to hurt religious sentiments are punishable not allowed and such advertisement may be punishable under section 153A and section 295A of the Indian Penal Code, 1860.

In the case of Mahendra Singh Dhoni V. Yerraguntla Shyamsundar^[26] the cricketer Mahendra Singh Dhoni was portrayed as Lord Vishnu on the cover page of the magazine ‘Business Today’ with the caption “God of Big Deals”. He was holding the products which were endorsed by him.  The case was filed against the cricketer under section 295A of the Indian Penal Code. The Supreme Court ruled out in this case that “section 295A of Indian Penal Code only penalizes those acts that are done with a deliberate and malicious intention to outrage the religious feeling or beliefs of a class of citizens. Hence under this Mahendra Singh Dhoni was not considered to be liable”.^[27]

(ii) Tobacco and Alcohol Advertisements

The advertisements of tobacco, cigarettes, alcohol and other drugs related products are banned in India. These kinds of products directly affect the health of the people and damage the society. Rule seven of the Cable Television Network Rules, 1999 says that any advertisement which is promoting the sale of cigarettes, tobacco products, liquor, wine, alcohol or other intoxicants are not permitted in India. The advertisement of cigarette is banned under the Cigarettes and Other Tobacco (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003. This Act also makes it compulsory to print statutory warning on the packets of cigarette and other tobacco products.

(iii) Prohibition on Professional Advertisements

An advocate, under the Advocates Act, 1956 cannot solicit or advertise his work either directly or indirectly, whether by circulars, advertisement, touts, personal communication, interviews not warranted by personal relations, furnishing or inspiring newspaper comments or producing his photographs to be published in connection with cases in which he has been engaged or concerned. His or her sign/board or name plate should be of reasonable size.^[28]

There are other professions also which cannot advertise for instance the doctors under the Medical Commission of India cannot advertise that they have sure sort treatment of any disease etc. The Chartered Accountant (CA) under the Chartered Accountants Act, 1949 not to promote their profession by showing the degrees, any print or digital advertisements of their work and expertise.

(iv) Advertisements Relating to Sale and Purchase of Human Organs

The Transplantation of Human Organs and Tissues Act, 1994^[29] has expressly prohibited any commercial advertisement of human organs.^[30] The sale, purchase or advertisements of human organs, cell or tissues are prohibited in India.

Impact of False and Misleading Advertisements and Consumerism

In our country many companies resort to false and unethical advertising practices. Many herbal products are advertised as a cure for all kinds of ailments. There are false and misleading representations that goods and services are of a particular standard, quality, grade, composition, style or mode, which they are actually not. For instance, a pharmaceutical company advertised that use of its paracetamol tablet did not have any side effects like aspirin, but it supressed the experts’ report that the use of any paracetamol had an adverse effect on the liver.^[31]

As Baba Ramdev and his company Patanjali Pvt. Ltd. claimed in the advertisement that their Ayurvedic medicine ―Coronil has cured many COVID-19 patients. This advertisement was challenged under section 3 and section 5 of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and a case against the manufacturer for the misleading advertisement as defined under section 2(28) and punishable under section 89 of the Consumer Protection Act, 2019 was filed.[32]

1. Recommendation of the Sachar Committee Report 2006

The Sachar Committee has recommended the following acts of sellers as unfair trade practices:

(1)    “A seller  should not falsely represent that:

a. The goods are of a particular standard, quality, grade, composition, style or mode, if they do not possess that qualification;

b. The rebuilt, second hand goods are new goods.

(2)    Offering gifts or prizes with the intention of not providing them and conducting professional contests”.

The Committee was of the opinion that all the aforesaid unfair trade practices should be punishable as an offence or any person or undertaking indulging in any of these activities should be liable to be prosecuted.^[33]

The Rajinder Sachar Committee report suggested the enactment of a new law which deals with protection of customer from false representations. The committee said that the false and misleading advertisements are not covered under the Consumer Protection Act, or other similar laws. It recommended that the advertisements and sales promotions are the well-established modes of modern business techniques. The advertisements should be true and advertisements must speak the truth, if the advertisement speaks the half-truth in the presentation of advertisement it is also covered under misleading advertisements because things are omitted that should be informed. The object of legislation is to promote more transparency between producer and consumers in relation to products and services offered for sale. 

2. Consumerism

Consumerism means awareness about the protections available regarding the rights of the customers. The consumerism initially started when the need of consumption of over manufactured products in the market. The manufacturer by advertisement spread the information of the product to sell enhances the sale. These advertisements may make false and misleading claims to attract more.

The Consumer Protection Act, 2019 came into existence on 20^th July 2020. The Act, 2019 shifts focus from ‘Caveat Emptor’ (buyers beware) to ‘Caveat Vendor’ (sellers beware). Because of consumerism people are much aware about their rights and duties, defective goods and complaint and redressal mechanism. The object of the Consumer Protection Act, 2019 is to render inexpensive, simple and speedy remedy to the customers against defective goods and deficient services.

The Consumer Protection Act, 2019 has widened the definition of ‘consumer’, ‘unfair trade practice’ and has added the definition of ‘advertisements’ and ‘misleading advertisements’ as well. The Act covers fraud by seller through online and offline medium both. Under section 2 clause (9) of the Act, 2019 the consumer has six kinds of rights "consumer rights" includes,—

(i) “the right to be protected against the marketing of goods, products or services which are hazardous to life and property; 

[1] The Consumer Protection Act, 2019(Act 35 of 2019),s. 2(28) "misleading advertisement" in relation to any product or service, means an advertisement, which— (i) falsely describes such product or service; or (ii) 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 (iii) 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 (iv) deliberately conceals important information. [2] Jay D. Lindquist, Proceedings of the 1984 Academy of Marketing Science (AMS) Annual Conference 253 (Springer, 2015). [3] ILR (2010) 4 Del 489. [4] Bodo B. Schlegelmich, Marketing Ethics: A International Perspective 107 (International Thomson Business Press, 2001). [5] FAO(OS) 185/2016. [6] William F Arens, Contemporary Advertising 65 (Tata McGraw-Hill Publishing Company Limited, 2008). [7] S. S. Kaptan, Social Dimensions of Advertising 30-31 (Sarup & Sons, 2003). [8] 2004 T.N.C.R November 139-149 SCDRC. [9] Vallanadu Narayanan Viswanathan, Consumer Rights in Service Sector 75 (Concept Publishing Company, 2008). [10] Kim Bartel Sheehan, Controversies in Contemporary Advertising 57 (Sage Publications Ltd, 2013). [11] 1970 Mys. 154. [12] M C Shukla, A Manual of Mercantile Law 14 (S Chand and company limited, New Delhi, 2019). [13] Supra note 2, s. 2(47). [14] The Competition Act, 2002 (Act 12 OF 2003), s.3. [15] COMPETITION COMMISSION OF INDIA Case No. 15 / 2010. [16] Available at: https://indiankanoon.org/doc/115382600/ (last visited on April 25, 2019). [17] 2013(55) PTC 499. [18] 167(2010) DLT 278. [19] 1999(19) PTC 741. [20] Available at; http://ijlljs.in/wp-content/uploads/2014/10/false_Advt.pdf. (last visited on December 24, 2021). [21] (1892)EWCA Civil 1, 1QB 256(CA). [22] Constance E.Bagley, Craig E. Dauchy, The Entrepreneur’s Guide to Law and Strategy 342 (Cengage Learning, 2017). [23] S H H Kazmi, Satish K Batra, Advertising and Sales Promotion 55 (Excel Books, 2008). [24] The Constitution of India, arts. 25-28. [25] Marianne M. Jenniings, Real Estate Law 547 (South-Western Cengage Leaning, 2014). [26] (2017)7SCC 760. [27] Li-ann Thio, Religious Offences in Common Law Asia, Colonial Legacies (Constitutional Rights and Contemporary Practice) 168 (Hart Publishing, Great Britain, 2021). [28] The Advocates Act 1961(Act 25 of 1961) s. 35, the Bar Council of India r. 36. [29] The Transplantation of Human Organs and Tissues Act, 1994 (Act 42 of 1994). [30] The aim of the Transplantation of Human Organs and Tissues Act, 1994 is “to provide for the regulation of removal, storage and transplantation of human organs for therapeutic purposes and for the prevention of commercial dealing in human organs”. [31] A.C. Fernando, Business Environment 300 (Dorling Kindersley (India) Pvt. Ltd., 2011). [32] Criminal case filed against baba Ramdev available at : https://www.google.com/amp/s/indianexpress.com/article/cities/chandigarh/criminal-complaintfiled- against-baba-ramdev-patanjali-ayurved-in-chandigarh-court-for-attempt-to-murder-sale-ofadulterated- drugs-6478247/lite.(last visited on December 12, 2021). [33] Mahendra Kumar Padhy, Advertising Management: Theory & Practice 76 (University Science Press, New Delhi, 2011). [34] Supra note 2, s. 2(9).