Celebrity endorsers could face 10 lakhs fine, 2 year jail for misleading ads

PTI

New Delhi, 14 April 2016: A parliamentary panel is likely to recommend a hefty penalty and a jail term of up to five years to celebrities endorsing misleading advertisements.

 

"The panel has discussed the issue at length at several meetings. It felt there was a need to fix some accountability for misleading ads. It has decided to recommend a hefty fine and even a jail term of up to five years," a source said.

 

For a first-time offence, the panel is planning to propose a Rs. 10 lakh fine or imprisonment up to two years or both. A second offence could attract Rs. 50 lakh fine and imprisonment for five years.

 

The panel is also planning to propose increase in the penalty for subsequent offences, which can be linked to the sale volumes of such products or services, sources added.

 

The 20-member Parliamentary Committee on Consumer Affairs, headed by Telugu Desam Party MP J C Divakar Reddy, is scheduled to meet again on April 19 to finalise the report, which will later be placed before the Parliamentary session starting April 25.

 

The sources added, "The panel is concerned about consumers who get misled by celebrity endorsements of products and services which are either poor quality or sub-standard."

 

The panel observed that a steep financial penalty is necessary to ensure brand ambassadors become careful while signing an advertisement contract with private firms.

 

On action against Maggi brand ambassadors like Madhuri Dixit, Consumer Affairs Minister Ram Vilas Paswan had last year said: "Everybody associated with the misleading ads put out on the nutritive value of Maggi Noodles was liable for action under FSSAI."

 

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