National Consumer Day

Why Misleading Advertising Remains a Persistent Threat Despite Consumer Protection

On December 24, India celebrated National Consumer Day, marking 39 years since the enactment of the Consumer Protection Act, 1986. This legislation—and its successor, the Consumer Protection Act, 2019—has aimed to shield millions of consumers from exploitation. However, despite these robust frameworks, the latest data reveals gaps in enforcement and rising challenges like misleading advertisements, digital fraud, and opaque regulatory processes.

Take, for example, the Central Consumer Protection Authority (CCPA). Empowered under Section 21 of the 2019 Act, it has adjudicated a range of cases against false advertising. Yet, while the authority has fined violators up to ₹50 lakh and banned endorsers in particular cases, the total penalties levied remain modest relative to the size of industries such as fast-moving consumer goods (FMCG) or tech-based platforms. This imbalance raises critical questions about consumer rights efficacy as corporate actors increasingly dominate advertising ecosystems across digital platforms.

Institutional Mechanisms Under Consumer Protection Act, 2019

At its core, the Consumer Protection Act, 2019 sought to modernize and strengthen consumer safeguards initiated by its 1986 predecessor. The Act’s Section 10(1) established the Central Consumer Protection Authority (CCPA), implemented in July 2020. This apex consumer watchdog handles cases relating to unfair trade practices, misleading advertisements, and violations of consumer rights.

• Misleading advertisement provision: Section 2(28) defines false or deceptive claims that mislead consumers about the quality, nature, or benefits of goods and services. This provision addresses an increasingly digitized advertisement landscape.
• Punitive powers: Section 21 allows the CCPA to impose financial penalties of up to ₹10 lakh for initial offences and up to ₹50 lakh for repeat violations. Endorsers can also be banned from future promotions for up to three years for subsequent misrepresentation.
• Other actions include grievance mechanisms like the National Consumer Helpline 2.0, an AI-enabled multilingual system that resolves over 12 lakh complaints annually, with 65% handled via digital channels.

Despite these provisions, consumer distress continues in high-stakes industries such as medical devices and e-commerce. Amendments to legal metrology in 2025 have mandated ‘country-of-origin’ disclosure and stricter pricing norms, but reports show companies delaying implementation without significant penalties. The ₹38.68 crore released under the Consumer Welfare Fund in FY 2024–25 also raises questions about whether such allocations are sufficient to scale awareness initiatives.

Policy Strengths Meet Ground-Level Realities

The Consumer Protection Act’s ambitions contrast starkly with the realities faced by ordinary consumers. Statistics from the e-Jagriti Platform, launched in January 2025, highlight these tensions. While over 1.35 lakh complaints were filed in 2025, a mere 3% related to misleading advertisements—a testament to how consumers often fail to identify deceptive marketing practices or engage with grievance platforms amid bureaucratic hurdles.

Consider misleading advertisements: the Act empowers the CCPA to fine brands heavily, but enforcement seems uneven. Precedence shows that corporate entities often stall compliance through legal appeals, delaying resolutions for years. In sectors like medical devices and pan masala, new labelling rules under legal metrology amendments have met resistance, leaving consumers vulnerable.

Then there’s financial scale. India’s Bureau of Indian Standards (BIS), which certified over 45,926 samples in 2024–25, remains underfunded relative to the growing demand for product safety in e-commerce and imported goods. The ₹38.68 crore Consumer Welfare Fund similarly pales in comparison to the complexities of educating and empowering over 1.4 billion consumers. The irony, of course, is that despite technological advancements like AI-enabled dispute resolution, the Act struggles with delays and limited public outreach—particularly in rural areas.

Structural Tensions: The Role of Federalism and Oversight

This situation mirrors a larger governance pattern in India: the friction between centralized policymaking and state-level enforcement. Consumer protection, while framed as a national priority, is often regulated unevenly by individual states. For instance, states with higher levels of digital connectivity report stronger consumer grievance resolution rates on platforms like e-Jagriti—a striking gap indicative of structural inequalities.

Additionally, inter-ministerial coordination remains a weak link. The Ministry of Consumer Affairs, Ministry of Electronics & IT, and BIS are expected to work in tandem on emerging issues like dark patterns in digital marketing and cross-border e-commerce fraud. Yet, their siloed operations often result in reactive policymaking instead of proactive reforms—leaving regulatory loopholes that are routinely exploited by violators.

Comparisons with the United Kingdom

The United Kingdom’s regulatory apparatus provides an instructive contrast. The UK’s Advertising Standards Authority (ASA) operates independently from the government with broader powers to scrutinize digital advertisements. It uses AI to actively monitor campaigns and publishes quarterly reports on violations—a model that combines transparency and accountability far more effectively than India’s current system.

Moreover, financial penalties in the UK are levied swiftly and proportionally to annual company revenues, ensuring deterrence. India’s fine structure under the CCPA, in contrast, often amounts to a fraction of annual profits for large firms, making non-compliance a calculated risk rather than an outright fallacy.

Evaluating Success: What the Act Needs to Deliver

To ensure consumer protection truly serves its purpose, success metrics must be outcome-driven, not just activity-based. The number of misleading advertisements penalized, the quantum of fines collected, and timelines for grievance redressal should be tracked transparently. Expanding Consumer Welfare Fund allocations and making rural outreach the centerpiece of awareness campaigns could also produce measurable change.

Yet much depends on how swiftly regulatory agencies modernize enforcement strategies to match global best practices—particularly for emergent areas such as AI-driven fraud detection or cross-border disputes. Until then, the promise of consumer protection will continue to suffer under the weight of fragmented execution and weak deterrence.

Exam Practice

Prelims MCQs:

1. Which section of the Consumer Protection Act, 2019 empowers the CCPA to act against misleading advertisements?
• (a) Section 2(28)
• (b) Section 10(1)
• (c) Section 21
• (d) Section 19
2. In which year did the Central Consumer Protection Authority (CCPA) become operational?
• (a) 2018
• (b) 2020
• (c) 2020
• (d) 2021

Mains Question:

Critically evaluate whether the Consumer Protection Act, 2019 has succeeded in achieving meaningful deterrence against misleading advertisements and unfair trade practices. Assess the structural limitations involved in its enforcement across states.

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