Can we hold celebrities responsible for products that cheat?

It is a question of time before the so-called brand ambassadors are held liable for issues like cheating in real estate or financial products, soft drinks and packaged food. After all, if cricketers and actors built their palaces on the money earned from advertising these products, then they need to consider paying for the hospitals required to cure those affected too



Genelia D’Souza, a Bollywood actress was recently summoned by the Andhra Pradesh High Court to explain her version in and role as brand ambassador in a real estate project called ‘Anjaniputra’ located close to Hyderabad Deccan that seems to have gone bust. This is the latest in how society and the laws in India are dealing with the extremely vexatious issue of misleading and deceptive advertising. It is a matter of time before similar questions are raised by other consumers, swayed into investing in products or services, by fraudulent advertisements endorsed by celebrities who are supposed to also be role models.



There are other examples as well. A clear example is the way the Goa government put a rapid end to the Airtel ad defaming Goans and Goa. If the state hadn’t, the implication is clear, this would have become an electoral issue. So, the chief minister of Goa moved and issued a simple ultimatum on behalf of the people of Goa. This is something the advertising industry has yet failed to recognise—the power of the voting public to correct such flagrant arrogance by advertisers and their agencies.



Just like with politicians, an advertisement or the brand ambassador and product behind it, can simply be voted out. Thrown out in disgrace. This message is clear—the advertiser and ad agencies cannot work on the premise that the Indian consumer is a fool. They had better learn to respect their constituency—the consumer.



Well, agencies must also question whether leading “brand ambassadors” like Sachin Tendulkar, Amitabh Bachchan and Shah Rukh Khan really have the credibility to achieve much. After all, the success of a product or service does not often correspond to that of the amount paid for the endorsement—especially when their movies don’t do well or the centuries stop flowing from their bats.





The list of endorsed products and service which flopped is almost as long as the list of brands for which these celebrities provided their name and face. But that's business, win some, lose most. However, when it comes to absolute cheating or the products are found to be harmful, what is the liability for the said brand ambassador? Shouldn’t the brand ambassador be held liable, too?





It is a question of time before the so-called brand ambassadors are held liable for issues like cheating in real estate or financial products, bad health due to soft drinks and packaged food and similar products. The laws exist, and retrospective amendments appear to be the flavour of the season—especially when they are brought in with an eye on the electorate, remember. After all, if cricketers and actors built their palaces on the money earned from advertising soft drinks and breakfast cereals, to name just two products, then they need to consider paying for the hospitals required to cure those affected too. These are misleading advertisements which have consequential effects. What about direct frauds?



In one such case of a direct fraud and outright cheating due to misleading advertisements called the “Home Trade scam”, going back to 2002, where almost Rs2,750 crore of investor funds were literally stolen and transferred to Mauritius, the luminaries endorsing the whole fraud were none other than Sachin Tendulkar, Shah Rukh Khan and Hrithik Roshan. This, by the way, included almost Rs100 crore of Seaman’s Provident Fund money—so there is a personal disclosure here, as I am an ex-seafarer. Please recall—this was in 2002, and the Bofors scam of about a decade before that was for all of Rs60 crores or so.



More details on this fraud, which is still not resolved, can be read here:-



Home Trade scam: still waiting for justice



On the other hand, this is what Piyush Pandey of Ogilvy & Mather had to say about the subject, way back in 2002: “Mr Pandey strongly believes that the Home Trade scam will neither affect the status of these celebrities nor the trend. I think celebrities just do their jobs for the money they get from the company. And they have nothing to do with the company.”



Blame The Brand, Not The Ambassador: Experts



(The Seaman’s Provident Fund money, by the way, was repaid in full by the Government of India, out of our tax-payer’s money. And I presume the advertising agencies will be following fresh developments on this issue carefully, as will the celebrities. The almost total absence of cricketers and movie stars from soft drink ads in the recent past is one such aspect. Mr. Pandey might wish to consider getting his brand ambassadors to reimburse the Government of India on this one head alone, to start with?)



Move on to the present date. The dividing line between a paid advertisement and an editorial or news report has almost vanished in most mainstream media. But this deception has not gone un-noticed, and at a recent seminar held in Delhi under the aegis of the ministry of consumer affairs, the larger issue of misleading advertisements of all sorts having reached menacing proportions was brought out.



Moneylife’s managing editor Sucheta Dalal was an invited speaker at this seminar and her presentation is going to be provided along with this article. The seminar brought out the following aspects of misleading and fraudulent advertising:



# Due diligence and restraint to be exercised while working within the guarantees of freedom of speech

# The definition of the term “misleading advertisement” globally and in India

# The shared responsibilities of the three stake-holders—advertiser, advertising agencies and the media

# The problem of misleading advertisements in India despite legislations

# Liability of endorsements by “brand ambassadors” or similar

# Suggestions from the consumers and others impacted by misleading advertisements



(For more info click here)



Moneylife shall follow and report on this subject regularly, and readers are invited to provide their views.



(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love—writing.)