The rampant misuse of social media to advertise financial products has been a source of constant worry for markets regulator Sebi. It is now in the process of issuing a consultation paper to regulate financial influencers or ‘finfluencers.’ In parallel, the Advertising Standards Council of India (Asci), too, has been periodically investigating such misleading ads. Here is a sample of the Asci orders on financial advertising over the past few years .
The first concerns Sharan Hegde, a leading finfluencer. Asci had suo moto taken up a complaint about an Instagram post of Hegde promoting Cred (Dreamplug Technologies Pvt. Ltd). According to Asci, “the advertisement shows an influencer promoting a reward-based credit card payments app. There is no disclosure label that clearly identifies it as an advertisement. The influencer has not disclosed details regarding any material connection, monetary or non monetary, between the advertiser and the influencer…. The influencer has not mentioned disclosure labels like advertisement, ad, sponsored, collaboration, partnership, employee, free gift in the Instagram post. The advertisement is misleading by omission and exploits the consumer’s lack of knowledge and hence the complaint is upheld.”
Responding to a query by Mint on this, Hegde said “This was a mistake on the ASCI’s side. We have gotten on calls with them too and I’m personally in touch with the CEO Manisha Kapoor. Every single post of mine has the #ad mentioned if it’s a promotion. It’s digital proof for everyone to see.”
Asci chief executive Kapoor said Hegde did call her but did not ever bring up this issue.
Another Asci order pertained to Octa FX. Forex and binary trading apps are illegal under the Foreign Exchange Management Act, and the Reserve Bank of India has issued an advisory on their use. However, advertising by such apps located outside India has been rampant over the past few years.
In connection with one such ad, Asci took up a complaint against Octa FX and Pritam Holme Choudhury, a influencer. In the absence of any response from the advertiser or the influencer, the consumer complaints council of Asci concluded that the Youtube video is “misleading by omission and exploits consumers’ lack of knowledge. The Youtube Video contravened the ASCI Code and the complaint was upheld.”
Asci also investigated a complaint against Axis Bank for an ad campaign that encouraged LGBTQIA+ community to open accounts with the bank. However, the bank actually barred two members of the community when they tried to open an account. Asci observed that the campaign had the slogan ‘Dil Se Open’ which was written on the screen with Axis Bank branding. The campaign used different gender symbols and represented various gender communities like gay, bisexual, transgender, etc. The Asci council decided that the advertisement creates a perception in the minds of users that all types of persons can open a joint savings account. However, this expectation was not met by the advertiser when the complainant went to the bank to open a joint savings account. The council concluded that the advertisement was misleading and likely to lead to widespread disappointment among consumers, particularly the LGBTQIA+ community.
Queries sent by Mint to Octa FX, Choudhury and Axis Bank did not elicit any response.
Asci’s Kapoor told Mint that when an advertiser fails to comply with their regulations, they escalate it to the government. That said, Asci is a self-regulatory body and cannot enforce compliance on its own.
So, despite Asci’s codes and willingness to investigate violations , the lack of regulatory powers has offered scant protection to India’s consumers.
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Updated: 17 Aug 2023, 11:46 PM IST