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Menace of Misleading Advertisements in Indian Real Estate: The Disease and its Cure

Advertising is a powerful tool. In this ever-expanding world, where the goods and services are increasing in variety, advertising has emerged as a potent force to influence potential as well as existing customers all across the globe. A brand leaves no stone unturned to enforce their products and services on customers through various kinds of advertisements and do not hesitate to blow huge sums of money for this purpose. As soon as a new product or service is launched in the market, a flood of advertisements is released in newspapers, hoardings, magazines, websites, e-portals and social media channels. It will therefore not be wrong to claim that advertisements play a major role in invoking the interests of buyers and persuading them to actually choose a product of a particular brand over their competitors’. The Indian real estate sector is no exception to this rule.

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Advertising is a complex process which has intricate intertwinings with economic, sociological, aesthetic as well as psychological factors. Every end user perceives the information conveyed in advertisements in their own way and thus it becomes imperative to keep misleading information in advertisements to a bare minimum. But sadly, misleading advertising tactics have engulfed all sectors in our country. The Indian real estate sector has also fallen into this vicious trap of false advertising. Real estate companies have started portraying incorrect or manipulated information in their advertisements which naturally has an adverse effect on their customers’ buying decision. With this problem at an all-time high, consumers have to be very prudent and cautious else they too can end up falling prey to fraudulent ads.

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How Real Estate Advertisements Mislead

As consumers of large scale products and services, we depend mostly on the goodwill of an advertisement to guide us to the right choice. We mostly believe what we see or hear about a product to be true. However, that is not always the case. Many a times, the advertisements and brands we trust blindly, end up deceiving us. Real estate developers use misleading representations in advertising their brand image as well as their properties and projects. This can range from a false idea about the quality of apartments, dishonest disclosing of carpet area, date of completion, discounted prices (which more often than not have hidden charges), etc. Luring buyers by increasing property prices and attaching a ‘freebie’ with it also constitutes false advertising.

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All the information in false advertisements is inconsistent with the actual facts and figures which in turn misleads you into making a wrong decision. To further their malice, developers also resort to the endorsement of their brand by well known and loved faces of celebrities who are paid exorbitantly to sell their products to the general public. Now who wouldn’t want to invest in an apartment which is being endorsed by the charming figures of the glamour or sports industry? In most cases, even the star endorsers are misled, not being aware of the imminent they are becoming a part of.

How Misleading Advertisements Affect Consumers

Advertisements are powerful enough to influence consumer behaviour and subsequently configure their needs. Blatantly put, misleading or false advertising in any sector is strictly illegal. Despite of that, we find builders and advertisers duping consumers this way or that, by finding loopholes in our judicial system. Developers and advertisers promote false information about their projects and properties which in turn deceives the end customer into making an unfair purchase or investment. We are easily influenced by the ‘bigger’ and brighter’ ideas of advertisers and end up spending money on something of inferior quality than was actually promised to us in those attractive hoardings and advertisements.

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By misleading customers through fraudulent information, real estate companies as well as its promoters and advertisers are not only violating the interests of the buyers but are also manipulating them into making a disadvantageous commitment. You don’t deserve this, do you? So the next time you are considering making an investment based on a catchy tagline or pretty endorser face, remind yourself that a good but not necessarily genuine advertisement has the power to persuade you to make a purchase that you otherwise may have refrained from making. And real estate is one sphere where a buyer can end up losing a very hefty amount of money or all their hard earned savings in one go!

Awakening of the Indian Government

With more and more cases of misleading advertisements in the real estate sector coming to the fore, the Indian government is gearing itself up for the first time to become equipped to handle such cases. The government authorities are beginning to formulate policies and regulations to penalise defaulters for luring buyers into investing by projecting false information in ads. After realising the perilous consequences of this disease, that seems to have spread into the crevices of the realty sector, the government is all set to implement a series of legal provisions to protect exploitation of home buyers at the expense of fraudulent advertisements.

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However, before announcing their verdicts, the government should consider a few things. Firstly, all participants of false advertising should be held responsible which not only include the developers but also the promoters and advertisers. A regulatory authority should be set in place which will ensure that no media channel is using distorted information to manipulate customer decision. That being said, the policies should safeguard the interests of all parties.

The Central Government has also issued a warning to all the captivating endorsers. They will also be held responsible for making an appearance in misleading advertisements for promoting bogus and insincere products. Celebrities have been advised by the Consumer Affairs Minister Ram Vilas Paswan to use a “common-sense approach”. Endorsers are as much responsible for the products they endorse as the builder or advertiser.

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The government has taken responsibility to ensure that customers are entitled to accurate information pertaining to real estate projects including completion date, blue prints, approvals, etc. There are many existing agencies and regulatory authorities that cater to customer grievances on the account of misleading advertisements. For a better future of the real estate sector in the country, a ‘Consumer Protection Bill’ will be taken up in the second half of the Budget session. This Bill will punish the defaulting parties in the case of advertisement fraud with a prison term of up to 5 years along with a heavy fine. This clause will take in its grasp not just defaulting builders and developers but also promoters, advertisers and endorsers. If this Bill becomes a reality, home buyers will breathe a sigh of relief.

Indian Grievance Cells against Misleading Advertisements

While many of you are not aware, many grievance addressing channels do exist in India for buyers who have been the victim of false advertising. Some of these are listed below:

  1. Real Estate Act (2016): Recently launched, this Act not only safeguards the buyers by preventing them from paying any booking amount until the developer has acquired all the required clearances but also calls for reimbursement of the entire amount with interest to customers in case the customer is a victim of false advertising.
  2. Bureau of Indian Standards (BIS): This consumer protection council penalises any company that misuses the Indian Standard (IS) mark on products which do not meet the requisite standards. Misuse may lead to a hefty fine along with imprisonment.
  3. Grievances Against Misleading Advertisements (GAMA): Launched by the Department of Consumer Affairs, this body provides online complaint registration facility to victimised buyers.
  4. The Consumer Protection Act (1986): Aggrieved consumers can contact the State/ National Consumer Redressal Commission and the District Consumer Forum who then penalise defaulting parties with prison term of up to 5 years followed by a heavy fine.
  5. Advertisement Standards Council of India (ASCI): This agency also provides redress to consumers who have been duped by misleading advertisements.

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Conclusion

While the positive impact and contribution of advertisements cannot be denied, we need to keep in mind that advertisements are manipulative tools with great power. And as the old adage goes rightly, “with great power comes great responsibility”. It is therefore an earnest request to all real estate developers, promoters, advertisers as well as endorsers that they not use the manipulative force of advertisements to harm consumers, tempting them into buying something they may not even need in the first place! Consumers, on the other hand, must become aware of their rights and bring to light any such incident of false advertising to the concerned authorities. The watch-dog agencies should continue to keep their prying eyes open in the interest of the general public. Once consumers are able to break the magical spell of incessant advertising, can they shun its influence on little things in their everyday lives, and tread the path of an aware consumer.

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