CCPA probing IAS coaching centres for misleading ads

17-11-2023

08:50 AM

1 min read

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The Central Consumer Protection Authority (CCPA) is probing 20 IAS coaching institutes for making misleading claims in their advertisements and for unfair trade practices.
Four of the twenty institutions have already been slapped with a penalty of Rs 1 lakh.

The Consumer Protection Act, 2019 replaced the Consumer Protection Act, 1986, and seeks to widen its scope in addressing consumer concerns.
The new Act recognises offences such as providing false information regarding the quality or quantity of a good or service, and misleading advertisements.
It also specifies action to be taken if goods and services are found “dangerous, hazardous or unsafe”.
The Act came into force in July 2020 and it will empower consumers and help them in protecting their rights through its various notified rules and provisions.

About:The CCPA is a statutory body constituted under Section 10 of the Consumer Protection Act, 2019.
Mandate: To protect the rights of the consumer by cracking down on unfair trade practices, and false and misleading advertisements that are detrimental to the interests of the public and consumers.
Concerned Ministry: Ministry of Consumer Affairs, Food and Public Distribution
Powers & Functions of CCPA: It is empowered to:
- conduct investigations into violation of consumer rights and institute complaints / prosecution,
- order recall of unsafe goods and services,
- order discontinuation of unfair trade practices and misleading advertisements,
- impose penalties on manufacturers/endorsers/publishers of misleading advertisements.

India's consumer protection regulator, CCPA, is investigating 20 IAS coaching centres for alleged misleading advertisements and unfair trade practices.
The centres are accused of using toppers and successful candidates' names and pictures to influence prospective aspirants.
Four centres have already been fined Rs 1 lakh each.

Every time the results of any competitive exam, including the UPSC Civil Services, are announced, coaching institutes would go an advertising spree.
Names and pictures of the top rankers are used in these ads to indicate their enrolment at the institute.
However, they do not disclose the nature of the enrolment, that is, the course they might have pursued in the institute.
- Ideally, the advertisements must include the course they enrolled for (which could be a test series, learning course or a revision course).
Thus, it would qualify as deliberate concealment of important information and categorisation as a ‘misleading advertisement’ under Section 2(28) of the Consumer Protection Act, 2019.
- First time violations may invite penalties up to Rs 10 lakh.
- Subsequent violations may attract penalties up to Rs 50 lakh, with other potential legal action should the non-compliance continue.

Size of coaching industries
- According to a study, the coaching class market in India is expected to reach about Rs 1.79 lakh crore by 2030.
- It is expected to grow at a Compounded Annual Growth Rate of 14.07% over a forecast period of 2023-30.
- Categorising the market based on types and channels, the study highlights that higher education holds the largest market share — of about 32.75% in 2022.
  - This is expected to increase to 34.75% over the same forecast period.
Key factors that have led to the creation of a thriving market
- Poor quality of teaching in schools
- High competition
- Increased preference for high-quality education among parents
- New generation wants to achieve things quickly and easily
- Increased income level
- Increase in the number of students pursuing higher education and professional courses
- To gain a competitive edge and improve their academic performance
  - Coaching institutes provide students with tools like practice exams, study guides, and individual tutoring.

A misleading advertisement is one that deceives or is likely to deceive people. It can also affect their economic behavior.

The eight basic consumer rights are: Right to basic needs; Right to safety; Right to information; Right to choose

Right to representation; Right to redress; Right to consumer education; Right to a healthy environment.

Source: ‘Misleading’ ads for IAS coaching institutes being probed by consumer protection body | Explained | Economic Times | The Print