Endorser Liability under the Consumer Protection Act, 2019

Endorser due diligence means taking reasonable steps to verify that claims made in an advertisement are truthful and not misleading before endorsing them. Under the Consumer Protection Act, 2019, such verification provides a defence against the penalty and prohibition applicable to endorsers of misleading advertisements.

Statutory standard

Under Section 21, an endorser avoids liability only by showing that due diligence was exercised to verify the truthfulness of claims about the endorsed product or service. The inquiry concerns the actual steps taken before endorsement, not merely the endorser's personal belief in the advertisement.

What due diligence requires

The 2022 Guidelines clarify the standards expected from an endorser.

• The endorsement must express the endorser's genuine and reasonably current opinion.
• It must rest on adequate information about, or experience with, the identified product or service and must not otherwise be deceptive.
• The endorser should examine whether factual representations made through the endorsement can be supported, rather than merely repeat the advertiser's claims.
• Any material connection with the advertiser that could affect the endorsement's weight or credibility must be fully disclosed when the audience would not reasonably expect that connection.

Consequences of inadequate diligence

For a false or misleading advertisement, the Central Consumer Protection Authority may impose a penalty of up to Rs 10 lakh on an endorser and up to Rs 50 lakh for a subsequent contravention. It may also prohibit the endorser from making endorsements for up to one year, extending to three years for a subsequent contravention.