HYDERABAD: The new Consumer Protection Act-2019 has come as a boon to consumers as they can file complaints against any advertisement that gives a false description of a product or service.
The Act, that has replaced the three-decades-old Consumer Protection Act-1986, proposes stiff penalties for not just the manufacturers, but the celebrities who endorse a false or misleading product or service.
Earlier, a consumer could only initiate legal action against a seller only at the place where the transaction has taken place. Now, the manufacturer would also be held liable for the product.
As per the new Act, a central regulator, Central Consumer Protection Authority (CCPA), would be set up, which would be an investigation wing headed by a Director-General to inquire into these complaints. The authority also has the power to initiate class-action and enforce refund and return of products.
So, celebrities may now have to err on the side of caution to avoid being penalised or sent to jail, as the CCPA can impose a fine of up to `10 lakh on celebrity endorsers or manufacturers for false or misleading ads.
The authority can also sentence the guilty to imprisonment of up to two years for false advertisements. In case of a repeat offense, it can impose a penalty of up to Rs 50 lakh and a jail term of up to five years. The endorsers can be barred from promoting ads for up to a year, extending up to three years for repeat offenders.
Holding endorsers accountable
The authority can sentence the guilty to imprisonment of up to two years for false advertisements. Only in cases where the endorser can prove that he/she has done due diligence to verify claims made in the ads, would they be exempted from punishment