Introduction

The Consumer Protection Act, 2019 protects consumers from unfair trade practices and misleading advertisements. Sections 2(47), 2(28), and 89 provide clear definitions, examples, and penalties that companies, advertisers, and endorsers must follow.

What Is Unfair Trade Practice

Section 2(47) of the consumer protection act defines an unfair trade practice as any deceptive or unfair method used to promote the sale, use, or supply of goods and services. This includes misrepresentation of product quality or standards, circulation of counterfeit or spurious goods, and refusal to issue proper bills or refunds. It also covers disparagement of competitor products and unauthorized disclosure of consumer information. The section ensures that businesses operate honestly and transparently while dealing with consumers.

What Is A Misleading Advertisement

Section 2(28) describes a misleading advertisement as one that creates a false or deceptive impression about a product or service. An advertisement becomes misleading if it makes false guarantees, exaggerates qualities, or conceals important facts. For example, if a company claims a medicine guarantees cure in three days without proof, the advertisement falls under this definition. Such provisions safeguard consumers from being misled by exaggerated or false promotional claims.

What Are The Penalties for Misleading Advertisements

Section 89 imposes strict penalties on manufacturers, service providers, and endorsers responsible for misleading advertisements. For the first offence, companies may face imprisonment of up to two years or a fine of up to ten lakh rupees. For repeat offences, the punishment can extend to five years of imprisonment or a fine up to fifty lakh rupees. Endorsers also face fines up to ten lakh rupees for the first violation and up to fifty lakh rupees for subsequent ones. They may also face bans from endorsements for up to three years. However, endorsers can defend themselves if they prove due diligence in verifying the claims. The Central Consumer Protection Authority alone has the power to initiate these prosecutions.

What Are Some Steps Businesses Can Comply To

Companies must ensure all advertising is accurate, transparent, and supported by evidence. Misleading or unfair trade practices can attract heavy penalties and damage brand reputation. Businesses must also make endorsers, influencers, and partners aware of these rules to avoid liability.
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Conclusion

The Consumer Protection Act, 2019 provides strict safeguards against unfair trade practices and misleading advertisements. By complying with Sections 2(47), 2(28), and 89, businesses can build consumer trust, avoid penalties, and maintain ethical trade practices.