Coaching Institutes Fined for Deceptive Advertising, Stricter Regulations Ahead

• Penalty on Coaching Institute: Central Consumer Protection Authority (CCPA) had imposed Rs 1 lakh fine each on famous institutes for similar deceptive advertisements.
  • Coaching Institute made false claims in its advertisements, such as advertising that its students had secured top ranks in the civil services examinations.
• Disclosure Mandatory: The government is likely to make it compulsory for IAS Coaching Institute to disclose the details of big claims they make to attract aspirants. The rules will be notified soon.
• Informed Decision Making: Authorities have also cautioned celebrities to exercise caution, and suggested not to endorse a coaching centre without fact-checking and should not make claims which cannot be substantiated.
• Violation of CPA: The notices were sent by CCPA for violation of provisions of Section 2(28) of the Consumer Protection Act, 2019.

Understanding the Definition of Misleading Advertisements under Consumer Protection Act, 2019

• Misleading advertisement under Section 2(28) of the Consumer Protection Act, 2019 relating to any product or service is defined as:
  • Falsely describing any product or service; 
  • Giving a false guarantee to, or likely misleading the consumers as to the nature, substance, quantity or quality of such product or service; 
  • Conveying an implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; 
  • Deliberately concealing important information.

Role and Objectives: What is the Central Consumer Protection Authority (CCPA)?

• Central Consumer Protection Authority is a regulatory body set up under Section 10(1) of the Consumer Protection Act, 2019, to handle matters affecting rights of consumers.
• CCPA targets individuals or entities that follow improper trade practices or display inappropriate or wrong advertisements affecting public interest. 

• Objectives:
  • To promote, protect and enforce the rights of consumers as a class
  • To conduct investigations into violation of consumer rights and institute complaints / prosecution.
  • To order discontinuation of unfair trade practices and misleading advertisements
  • To order recall of unsafe goods and services
  • To impose penalties on manufacturers/endorsers/publishers of misleading advertisements
• Powers of Central Consumer Protection Authority:
  • CCPA can order inquiry, either on receipt of complaint or suo-moto or as directed by the Central Government, in case of violations of rights of consumers or in notice of trade practices which is unfair.
  • Central Consumer Protection Authority can order an investigation by the District Collector or by Director General if there is prima facie evidence of violations of rights of consumers or unfair trade practices.
  • If an entity is following unfair trade practices or making any false or inaccurate advertisement, CCPA can call upon the entity and can direct them to produce any document or record to substantiate their claims.
  • After giving the proprietor entity the opportunity to be heard, CCPA can direct recalling of any dangerous, hazardous or unsafe goods or withdrawal of similar services, along with refunding the funds.
  • CCPA can help consumers to register complaints before the National Commission, the State Commission, or the District Commission, formed as per the Act.
  • CCPA can direct a producer or endorser or advertiser to discontinue advertisements which are wrong or misleading or prejudicial to consumers.
  • Central Consumer Protection Authority can prevent the endorser of a misleading product from endorsing any product or service for a time period ranging upto one year, and three years in case of contravention.