Social media influencers under ASCI's radar for next two quarters
Steep rise in violations of ASCI guidelines by influencers for promoting cryptocurrency and illegal betting companies.
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The Advertising Standards Council of India (ASCI) has taken a strong stance to curb the menace of social media influencers rampantly violating its guidelines. The self-regulatory body will now focus heavily on influencer activities for the next two quarters.
Storyboard18 had reported about social media influencers blatantly disregarding strict ASCI guidelines by pushing crypto advertisements without disclaimers.
Manisha Kapoor, Secretary General and CEO of ASCI said, “We have not received complaints against ads of influencers promoting crypto products in the recent past. Influencer activities will be in in focus for our next two quarters for suo motu surveillance.”
Kapoor further said, “To ensure a safe digital environment for consumers, it is important for influencers to be aware of their responsibilities and ensure they adhere to the requirements mandated by ASCI and the government.”
According to ASCI guidelines, all virtual digital asset-related advertisements released on or after April 1, 2022, must include the disclaimer, "Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions." This disclaimer must appear in promotional content across print, video, and audio mediums.
Despite these regulations, ASCI reported that over 400 cryptocurrency advertisements featuring influencers violated their guidelines in 2022.
Storyboard18 spoke to a renowned social media finfluencer with a follower base of over 1 million, he said, “The top influencers follow all guidelines which are laid by government including SEBI and ASCI. However, the micro influencers who often struggle to monetize their content fall into the trap of notorious companies indulging in betting and gambling.”
The finfluencer said, “Often such influencers end up promoting fly-by-night crypto companies in lure of money. This is basically a quick earning formula for an influencer which often can land them in huge legal trouble.”
The Central government in January 2023 made it mandatory for social media influencers to disclose all "material" interest such as gifts, hotel accommodation, equity, discounts and awards when endorsing any products, services or scheme, failing which strict legal action, including ban on endorsements can be taken.
In case of violation, the penalty prescribed for misleading advertisement under the Consumer Protection Act 2019 will be applicable. The Central Consumer Protection Authority (CCPA) can impose penalty of up to ₹ 10 lakh on manufacturers, advertisers and endorsers. For subsequent offences, penalty of up to ₹ 50 lakh can be imposed.
The CCPA can prohibit endorser of a misleading ad from making any endorsement for up to 1 year and for subsequent contravention, prohibition can extend up to 3 years.
