CCPA releases draft Guidelines for Prevention of Misleading Advertisement in the Coaching Sector

The Central Consumer Protection Authority (“CCPA”) vide notification dated February 16, 2024 released the draft Guidelines for Prevention of Misleading Advertisement in Coaching, 2024 (“Draft Guidelines”). The draft Guidelines have been issued under section 18(2)(1) of the Consumer Protection Act, 2019 (“CPA”) which empowers the CCPA to issue guidelines for the purpose of preventing any unfair trade practices (including issuance of misleading advertisements).

The draft Guidelines apply to all the persons who are engaged in the rendering coaching services. The draft Guidelines have been prepared with the purpose of safeguarding the consumers who fall prey to deceptive advertisement practices in the coaching sector.

The term ‘advertisement’ (as per the draft Guidelines) shall have the same meaning as provided under CPA which defines advertising as, “any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents”. It has been mentioned in the draft Guidelines that misleading advertisements (by relevant stakeholders in the coaching sector) will be governed by the CPA. For ease of understanding, ‘misleading advertisements’ (in relation to any product or service) have been defined under the CPA as, “an advertisement, which—

(i) Falsely describes such product or service; or

(ii) Gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or

(iii) Conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or

(iv) Deliberately conceals important information;”

Under the draft Guidelines, the term ‘Coaching’ has been defined as, “tuition, instructions or academic support or learning programme or guidance provided by any person”. The draft Guidelines provide for certain conditions and places certain obligations on persons involved in coaching. As defined under the draft Guidelines, ‘persons’ means, “an individual and includes a group of persons or a body corporate, or a trust, firm or society or an institution.”

• Conditions for Misleading Advertisements

The draft Guidelines lay down several conditions under which it can be determined whether an advertisement is considered misleading or not. As per the draft Guidelines, an advertisement will be considered as misleading if it:

1. Conceals important information related to the name of the course (whether free or paid) & duration of course opted by successful candidate or any other important information which can influence a consumer's decision to choose their services.

2. Makes false claims regarding success rates, number of selections, or rankings of students in any competitive exam without providing verifiable evidence.

3. Falsely represents that students' success is solely attributable to the coaching, without acknowledging the individual efforts of the students. Clearly state the extent of the coaching involvement in their success.

4. Creates false sense of urgency or fear of missing out that may heighten anxieties amongst students, or parents.

5. Any other practices that may mislead consumers or subvert consumer autonomy and choice.

• Obligations of persons engaged in coaching

The draft Guidelines further provide for obligations to be undertaken by every person who is engaged in coaching. The draft guidelines state that the persons engaged in coaching should ensure that the following information is disclosed along with the successful candidates’ photo:

a. Rank secured by successful candidate.

b. Name of course opted by successful candidate.

c. Duration of course opted by successful candidate.

d. Whether such a course is paid or free.

The draft Guidelines mention that the advertisements shall have disclaimer, disclosure or important information at a prominent and visible place. Moreover, the font of such disclaimer/disclosure/Important information (reflecting in the advertisement) shall be same as that used in the claim/advertisement. The advertisements for coaching are also required to accurately represent the facilities, resources and infrastructure available to students.

The draft Guidelines further provide for refraining from cherry-picking exceptional cases in order to create a skewed impression of success and to maintain transparency as well as truthful representation of what is being advertised regarding the coaching services.

The draft Guidelines prohibits the person engaged in coaching from the following activities:

1. Use names, photos, testimonial or videos of successful candidate in advertisement without successful candidate’s express consent.

2. Make false claims which includes 100% selection or 100% job guaranteed or guaranteed preliminary/mains or guaranteed admission to institutions or false testimonials of successful students or fake reviews

3. State or lead the consumers to believe that enrolment in coaching will guarantee the student a rank, high marks, temporary or permanent job, admissions to institutions, job promotions, salary increase, etc. unless the coaching is able to substantiate to such effect.

4. Falsely represent that the services are of a particular standard/quality.

5. Mislead or make exaggerated claims about faculty credential.

6. Falsely represent that the courses or certificate offered have recognition and/or approval of competent authority.

The draft Directions further highlight that in cases where the advertisements fall under the purview of existing laws or regulations, the provisions outlined in these guidelines will complement rather than supersede those regulations. In essence, it means that the draft Guidelines will serve as an additional layer of oversight and protection. As regards violations of the Guidelines, it has been mentioned that the provisions of the CPA will apply in such cases.