afaqs! news bureau

ASCI launches paid due diligence service for endorsers to curb misleading claims in advertisements

A panel of experts, from over 20 disciplines, will assess advertisements including technical claims.

According to Duff & Phelps’ ‘Celebrity Brand Valuation Report’, around 50 per cent of endorsements in India feature celebrities compared to around 20 per cent in the United States. It puts the overall brand value of the top 20 endorsers of 2020 in India at an estimated $1 billion.

The TAM AdEx report on celebrity endorsement says that overall, more than 25 per cent of advertisements telecast on TV in 2021 were endorsed by celebrities, of these more than 85 per cent were endorsed by film stars.

Such a flood of celebrity endorsers is good news for their fans but look at the other side, a risk of misleading claims looms in the shadows. Endorsers sign deals with brands but they do not sit and dig through research or independently verify claims; it is too time-consuming.

To curb the malaise of misleading claims in advertisements and to help endorsers not run afoul of the ASCI Code and the Consumer Protection Act (2019), ASCI has launched the Endorser Due Diligence service. A paid advisory, the service will offer ASCI’s expertise in advertising assessment, including technical claims that are part of the advertisement.

ASCI has established a panel of experts, from over 20 disciplines, ranging from advertising regulation and legal, ayurveda, microbiology, electronics, market research, nutrition, dentistry, product formulations, financial services, and so on.

The panel will assess the representations, statements, and claims in the advertisement from a consumer and technical perspective, examine the evidence in support of the claim where necessary, and thereby help the endorser conduct their due diligence.

The advertisements can be sent to ASCI at any stage, including pre-production. This ensures that the endorser can do their independent due diligence before the advertisement is produced.

The Consumer Protection Act, 2019 provides for the imposition of fines or even prohibiting the endorser of a false or misleading advertisement from making an endorsement of any product or service for a period, which may extend to one year. However, the act also provides for a waiver of such penalties or suspension if the endorsers have exercised due diligence to verify the claims made in any advertisement endorsed by them.

Subhash Kamath, Chairman, ASCI, said, “Endorsers, particularly celebrities have a huge fan following and they enjoy the trust of millions of consumers. There is therefore a direct moral and now, legal responsibility that they bear to ensure that they do not make representations in ads that could be considered misleading. ASCI has always required celebrities to be mindful of what they endorse in advertisements, and now the law requires them to do due diligence in this regard.”

Manisha Kapoor, Secretary-General ASCI said, “Endorsers may not always be experts when it comes to the products they push and the claims they make. The law makes endorsers liable for the advertisements they appear in, hence Endorser Due Diligence becomes a critical need. ASCI’s service that is speedy, confidential, and based on the assessment of a multi-disciplinary panel can help endorsers do their due diligence in a timely and comprehensive manner, ensuring that consumers are not misled and that the endorser too, fulfils their legal obligations.

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