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E-commerce Frauds : Online False Advertisements in India

With increasing popularity of e-commerce websites like Amazon, Flipkart, Shopclues and e-bay, e-commerce business in India has ushered a significant change in lifestyle and shopping habits of consumers. Use of social media networking and smart devices has remarkably improved the flow of online purchases.
Written by:
Shivi Gupta
Published on
24-Jul-18

With increasing popularity of e-commerce websites like Amazon, Flipkart, Shopclues and e-bay, e-commerce business in India has ushered a significant change in lifestyle and shopping habits of consumers. Use of social media networking and smart devices has remarkably improved the flow of online purchases. These online shopping platforms regressively use advertising and employ promotional marketing strategies to advertise their products and attract consumers. E-commerce websites in India are using short-term sale promotions to attract consumers, relying heavily on advertisements- online and offline.

When consumers decide to buy a product, they primarily rely on the information provided by companies in their product advertisements. Television, radio, events, print media like newspapers and magazines, and now emails and social media marketing are the different means of promotion, companies use to advertise their products. 

Advertising is an important tool used by e-commerce websites to exhibit their products, discounts and exclusive prices offered to consumers, which are sometimes even less than the prevailing MRP of the products to gain an edge over their competing e-commerce websites. However, this race to be on top has led to an increase in malpractices of false claims and advertisements with regards to quality, quantity, services, prices and discounts on products. 

 

Cases of online false advertisement in India

There have been many reported cases of false advertisement by e-commerce websites filed with the Advertising Standards Council of India, some of which are: 

  1. Flipkart’s ads that claimed ‘100% original products’ and ‘Flipkart matlab bilkul pakka’ were held to be not substantiated and misleading by exaggeration. 

  2. Amazon Kindle’s ad for ‘Unlimited Reading’ was held to be not substantiated as a limit of 10 books was advertised as an ‘unlimited offer’.

  3. OLA Cab’s claim for ‘OLA Micro @ Rs6/km’ was found to be misleading by omission and not substantiated. 

  4. Askmebazaar’s ad for ‘Asus Zenfone 2 at Rs 1435’ was found to be grossly misleading.

  5. Simplilearn Solutions ad where the company claimed to be ‘world’s largest professional certifications company’ was held to be grossly misleading.

What are the laws that deal with false advertisements in India?

This is no specific legislation to deal with false advertisements in India, however, the Consumer Protection Act, 1986 and the Monopolistic and Restrictive Trade Practices (MRTP) Act, 1969 provide remedies against companies who engage in false advertisements of their products. The Advertising Standards Council of India (ASCI) has established the ASCI Consumer Complaints Council to deal with false advertisements.

The objective of ASCI is to maintain and enhance the public’s confidence in advertising and ensure that advertisements conform to the Code for Self-Regulation which requires advertisements to be truthful and fair to consumers and competitors. The ASCI has the power to prohibit misleading advertisements which are offensive to public decency or morality and promote products which are hazardous or harmful to society, particularly minors. The primary purpose of the code is to protect the legitimate interests of the consumers by regulating patently false, misleading, and objectionable advertisements broadcasted on television, radio, and internet by advertisers, media, and advertising agencies. Under the code, the following requirements have to be fulfilled with regards to every advertisement aired or published in India:

  1. The advertising agencies and advertisers are required to produce substantiation when called upon by ASCI. 

  2. Before advertising, marketers must hold documentary evidence to prove all claims, whether direct or implied.

  3. Advertisements must comply with the law and must not incite anyone to break it.

  4. Consumers must not be encouraged to use products to excess. 

  5. Products should be safe and without side effects.

Remedies available in case of online false advertisements

In case of false advertising by an online e-commerce portal, a consumer can hire a lawyer and file a complaint with the Advertising Standards Council of India. There are three categories of complaints against false advertising that are accepted by the ASCI: 

  • Complaints from consumers, government officials and consumer groups.

  • Complaints from one advertiser against another.

  • Suo motu complaints from ASCI Board members, Secretariat, members of Consumer Complaints Council, etc.

The Consumer Complaints Council of ASCI redresses all false advertisement complaints in India. The ASCI’s Consumer Complaints Council follows the following complaint redressal procedure:

  • Upon receiving a complaint, the Secretariat requests the advertiser or agency to provide comments on claims of false advertising. 

  • The advertiser or agency is provided with an opportunity to present their side.

  • The Council takes a decision regarding the complaint within 4 to 6 weeks.

  • If the Council finds the advertisement to be false, misleading or not substantiated, then it informs the advertiser within 5 days. 

  • The advertiser s given 2 weeks period to comply with the Council’s decision.

Other reliefs against online false advertisement

Injunctions can be granted by courts when the misleading advertisement causes deception.  Compensation can be awarded by courts when the consumer proves that they suffered some injury or damages due to such false advertisement.  A Consumer Complaint can be filed with the District Consumer Disputes Redressal Forum, State Consumer Disputes Redressal Commission or National Consumer Disputes Redressal Commission. Need to file a complaint against false advertisement in India? Hire the best consumer complaint lawyers from MyAdvo! Email us at info@myadvo.in or call now at 9811782573.