The Advertising Standards Council of India (ASCI) has unveiled a due diligence service to assess whether claims by celebrities or endorsers in advertisements are ‘false or misleading’.
The self-regulatory body has set up a panel of about two dozen executives from stakeholder organizations to keep a check on such claims, in line with rules under the Consumer Protection Act, 2019.

“The panel includes executives from legal, advertising, talent management and financial services companies,” ASCI chairman Subhash Kamath told ET.

Under the Act, endorsers face steep fines for false or misleading claims, and can be prohibited from appearing in such advertisements for up to one year. They can be fined up to Rs 10 lakh for a false or misleading claim, while the imprisonment may extend up to two years. A subsequent offence will attract a fine of up to Rs 50 lakh and imprisonment of up to five years, as per the Act.
“Endorsers may not always be experts when it comes to products they endorse, so due diligence is crucial to ensure that consumers are not misled,” said ASCI secretary general Manisha Kapoor.

Industry executives said implementation could prove to be a challenge. They said claims that fall under a grey area also need to be scrutinized.

“Implementing these services and guidelines effectively is crucial. Also, in the age of digital and social advertising, it is very important to clamp down on transgressions immediately, instead of waiting for consumer complaints to escalate,” said Industrial Experts
In January, ASCI said Bollywood actors Ranveer Singh and Jacqueline Fernandez were among 20 influencers found violating influencer advertising guidelines.
Singh’s endorsement of Manyavar apparel and Fernandez’ endorsement of Colorbar cosmetics violated guidelines since they had not put out the required disclosures, it said.

“Advisory services are a powerful tool that can mitigate penalties on celebrities and influencers making misleading claims in ads under the Consumer Protection Act,” Kamath said.
Counselling celebrities on the technical and non-technical aspects of advertising is crucial, legal experts said, though it will be difficult to avoid legal scrutiny altogether.
“ASCI’s formal advisory service will now at least allow celebrities to claim that they have attempted to be diligent about what they are endorsing, given that there is now a third-party expert evaluation involved,” said Pritha Jha, partner at law firm Pioneer Legal.

Though this will mitigate the risk for celebrities, it could still invite legal trouble, she said.