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Reeling in the consumer fish with false advertising bait
For the most part, the average consumer is aided in their daily lives by these advertisements. Newspaper advertisements, billboards, and TV commercials are still effective, while sponsored posts on social media, personalised newsletters, and a plethora of friendly recommendations and WhatsApp messages accomplish the same job online.
But there are those times when what you see isn’t quite what you get.
Deceptive and misleading ads are not a strange term to many of us. These ads deliberately provide only certain segments of information, or altered photos, in order to create a false or inaccurate impression of a product or service they are selling. Due to this, it is considered that customers are poorly informed or not informed at all, and therefore will have to resort to making an uninformed decision, which may result in them having a dissatisfying experience, feeling cheated, and not being happy in the long run.
Despite the ethical ramifications of such a practice, however, we see a plethora of false advertising, in some fields more than in others. The health and fitness, hospitality, and e-commerce website sectors are the more notorious spaces where false advertising is predominant.
In Sri Lanka itself, we find many many instances of false advertising, be it the inappropriate use of “free” in promotions, extra-large snack packages with more air than product, and incorrect scientific data to promote products.
Speaking to The Sunday Morning Business, Consumer Affairs Authority (CAA) Executive Director Thushan Gunawardena mentioned that typically, people who are selling essential items and having a monopoly in the market will have misleading ads. “It’s a tendency. For example, if you take the classic case study of gas, Litro (Gas Lanka) continuously clouts the regulations and law with certain branding. For example, they say ‘high capacity’, but actually the capacity has been lowered,” he said.
However common it may seem, false advertising can actually be fatal for businesses and brands. Some may attempt to mislead the customer by including fine print on their advertisements that contradict their main selling point, while others may conceal side effects, hidden costs, or risks associated with the product. Some others may provide false information on designer brand, production quality, and place of production. Yet again, more may provide you with out-of-context statistics or offer false warranties.
These actions may create confusion about a brand, negatively affect customer trust, signal a waste of customer money, incite backlash against the said brand, and invite regulatory actions, notes experts. Legal action may also be sought against such advertising in some cases.
Countries like the US and the UK police false advertising through regulations like the Lanham Act and the Consumer Protection from Unfair Trading Regulations of 2008. Australia uses a combination of laws and regulatory bodies to monitor the implementation of the said laws. However, India has no precise law or act that deals specifically with fraudulent or consequences of fraudulent advertisements, and the consumer can hope to claim relief up to a certain extent under the Consumer Protection Act.
In Sri Lanka, our history of consumer protection begins with the Sale of Goods Ordinance of 1986, the Food Act, the Price Control Act, the Unfair Trading Commission, and finally the CAA Act No. 9 of 2003.
“In Section 31 of the CAA Act, action can be initiated if a company or organisation does decide to publish false information and/or misleading advertisements to market their products,” Gunawardena pointed out.
The CAA Act grants protection to traders and manufacturers against unfair and restrictive trade practices and to consumers through the regulation of trade and the prices of goods and services. The definition of anti-competitive practices (CAA Sec. 35), however, does not define or elaborate the anti-competitive advertising. Therefore, this gap can be filled by specific regulations against misleading advertising of food, devices, and cosmetics, and the SLRC Code to protect consumers from misleading advertising, notes Attorney-at-Law Aparrajitha Ariyadasa in a study. Other than the said statutes, the Sri Lankan legislature does not introduce a proper statute to protect consumers, competitors, and the general public against misleading advertising.
“It is the fault of the authorities, including the CAA. Currently, the issue is where we take a very laid back approach in terms of identifying and enacting new legislations and regulations. We are far behind in all this. Since 2003, CAA has not passed a single regulation, but the Act says we need to investigate and bring proper regulation into the market, which doesn’t happen,” the CAA Executive Director said.
However, he did note that the investigation launched by the CAA into the new gas cylinder released to the market without prior approval by Litro Gas Lanka will be a landmark case that will be filed, simply because of the scale of it. This investigation was launched in April 2021 and is ongoing. “We also file a lot of cases that don’t go in the media reports. They’re mainly due to wrong labelling, erasing descriptions, etc.,” Gunawardena added.
Moreover, in early 2020, the Food (Labelling and Advertising) Regulations of 2005, under the extraordinary gazette issued under the Food Act No. 26 of 1980, was implemented (after 15 years of its initial gazetting) which prevented brands from (among other things) using superlatives in product packaging and advertising, blurring or otherwise obscuring manufacture and expiry dates, utilising only one language for deliberate deception, using the term “natural” arbitrarily, and suggesting that any product was recommended by a medical association or practitioner unless approval is granted by the Chief Food Authority.
These measures were well received by consumers but garnered objections from brands and companies, particularly when it came to certain brand identities built around superlatives (Super Cream Cracker, Gold Marie, Supiri Samba) or being “natural” (fruit juices).
However, Attorney-at-Law Maxwell Ranasinghe states that the CAA’s legal provisions are more than enough to take action against deception and misrepresentation by marketers, and that the practical issue is that it’s rarely invoked, perhaps due to a lack of awareness.
Commenting on the matter, Gunawardena said it’s not just a lack of awareness. “If you decide tomorrow to go and file a case against Litro, this whole (investigation) can be stopped. But the moment someone tries to file a case against them, they buy (that person) over. Civil societies are also paid for. Everyone has a price,” he stressed.
In Sri Lanka, false advertising has become one of those things many consider a fact of life. Hence, resistance to misleading advertisements, or seeking legal action, may not be widely known or practised.
“The CAA is just an accessory, when the supreme authority rests with the people. We’re always waiting for someone to take this to court. It is the duty of the public to know the Constitution. There may be instances where the public is unaware, but that’s not an excuse,” Gunawardena commented.
While many brands and marketers take advantage of the fact that our country does not see many court cases regarding false advertising, with the ongoing global situation with regard to the Covid19 pandemic and the upheaval of the economic system, brands must consider whether their key strategy now should be honesty or a risk on a false gamble.