The ministry of consumer affairs has said that it will soon set up an inter-ministerial group to tackle misleading ads. The group will have the powers take suo moto action against errant advertisements and also to withdraw them
The menace of misleading advertisements such as tall claims made by beauty and financial products, using fake testimonies, pictures in ads related to educational and real estate, have come under the government’s scanner. The ministry of consumer affairs has said that it will soon set up an inter-ministerial group to tackle such ads. This group will take suo moto action against errant advertisements and will also have the power to withdraw them.
Rajiv Agarwal, secretary, Department of Consumer Affairs-Foods and Public Distribution said that, “We may have an inter-ministerial group which will take up fit and proper cases, where the government will be the complainant. We may have an investigative agency like MRTPC (Monopolies and Restrictive Trade Practices Commission). We need to take steps to investigate unfair trade practises and misleading advertisements.” Mr Agarwal was speaking at a seminar on “Impact of Misleading Advertisements on Consumers.
Last year, in September, the Prime Minister’s Office (PMO) had directed the Department of Consumer Affairs to prepare a draft regulation to keep a check on misleading advertisements. Following, the three ministries—information and broadcasting, consumer affairs and health—were coordinating to formulate a regulatory mechanism.
Mr Agarwal said that the group will have the power to order the withdrawal of an ad and it will then go to a consumer court. Currently, Section 2 (r) of the Consumer Protection Act provides a comprehensive definition of unfair trade practice, while Section 14 deals with the directions that the court can order on such practices. However, consumer courts have no power and cannot deal with misleading advertisements like the MRTPC.
Speaking at the same seminar, Prof KV Thomas, minister of consumer affairs, food & public distribution, said that, “the consumer courts neither have the power nor the infrastructure to investigate, suo moto into misleading advertisement nor take up such cases on their own, as done by the MRTP Commission. Nor do they have an investigative wing like the office of the DG (Investigation and Registration) under the MRTP Act.”
He added, “The consumer courts can only adjudicate over complaints filed before them. However, the consumer courts can issue interim orders stopping such advertisements pending disposal of the case. They can give directions to the advertiser to discontinue such advertisements and not to repeat it. They can award compensation for any loss or suffering caused on account of such unfair trade practices, they can also award punitive damages and costs of litigation.”
Mr Agrawal also said that the government is very keen on the concept of “corrective advertisement” as there were already provisions for it. It only needs to be more active as it will act as a deterrent for advertisers indulging in making misleading ads.
In India, the advertising industry is represented by the Advertising Standards Council of India (ASCI). The self-voluntary body insists that its independent review committee effectively acts against fake and misleading advertisements. However, ASCI can only act on specific complaints; it cannot initiate suo moto action or impose penalties.
TRAI said that the charges for such SMS or calls should not be more than four times of the applicable local charges. Consumer organisations have welcomed the move but feel that the rates should be reduced further
The Telecom Regulatory Authority of India (TRAI) has ordered telecom service providers to put a ceiling on the premium rate services such as SMS and calls made to participate in TV or radio programmes. The sector regulator said that the charges for such SMS or calls should not be more than four times of the applicable local charges. Consumer organisations have welcomed the move but feel that the rates should be reduced more.
Premium services are those which offer some form of content. It includes helpline services, voting, ring tones, gaming, participating in TV and radio shows, especially reality shows.
Anil Prakashan, president, Telecom Users Group, told Moneylife that, “It is a good decision. Earlier it was totally unregulated. At least there are some restrictions now. However, we still feel it’s high. For service providers it is a clear mode of revenue, hence the charges are high. Charges for such SMS and calls should be on par with the regular charges. Most of such shows entice people to participate.”
According to TRAI, unlike other premium rate services where the value of the content is substantial, the content element involved in the calls and SMS made for participating in competitions and voting, is minimal.
The telecom regulator also observed that service providers generally charge Rs2-Rs5 per minute for each call made and each SMS sent to participate in the contest, voting, survey and competitions. It held that while it is the subscriber’s choice to make or not to make such calls/SMS, an unreasonably high price results in undue gain to the service providers at the cost of the customer.
TRAI in its order stated that the present practice premium rate services are priced uniformly for subscribers of all plans, irrespective of the rates available in the tariff plan. There is no relation between the rates available in the tariff plan and those charged for such service. Hence it decided to put a cap on such calls and SMSes.
“The whole idea of such shows is money making. However, the restrictions that have been put are welcomed. Charging substantially high rates is clearly unethical. The revenue is often shared by the telecom players with third parties like the campaigner or the advertiser. But the cost is borne by the consumer,” says Hemant Upadhyay, advisor-IT & telecom of Consumer VOICE, an online magazine on consumer awareness.
Even TRAI stated that the revenue generated through the premium rate services is shared between the telecom access provider and the content service providers. It also clarified that it “does not intend to restrict the growth of services involving content nor curb the revenue streams available for the service providers.”
The issue of higher charges of SMS and calls to participate in TV or radio show was also raised by the information and broadcasting ministry. The ministry, in November last year, acting on complaints received from the viewers that quiz based television shows are charging hefty call and SMS rates to respond to their questions, issued an advisory to the Indian Broadcasting Foundation and the News Broadcasters Associations to come out with a specific guidelines for regulating such quiz shows and ensure transparency in them. As per the mandate, all the TV channels have to display the rate of these calls and SMS.
Randhir Verma, president, Chandigarh Telecom District Telephone Subscribers Association feels that, “Consumer education is required. They should clearly know what are the charges of such services and how are they calculated. It will help subscribers to make better choice. Awareness through the medium of advertisement, seminars is essential. Last year, TRAI has spent nothing on consumer advertisement.”
Mahindra Holidays and Resorts’ MD Rajiv Sawhney said: “In the same quarter of previous year, we had very large number of corporate bookings, which is a high margin business, as compared to the fourth quarter of 2011-12”
New Delhi: Mahindra Holidays and Resorts India reported 7.34% decline in its net for the fourth quarter ended 31 March 2012, at Rs37.22 crore, against Rs40.17 crore in the same period of previous fiscal, reports PTI.
The company’s net sales for the quarter, however, increased 12.77% to Rs173.46 crore, as against Rs153.81 crore in the fourth quarter of 2010-11.
Commenting on the reasons for decline in net profit for the quarter, company’s MD Rajiv Sawhney said: “In the same quarter of previous year, we had very large number of corporate bookings, which is a high margin business, as compared to the fourth quarter of 2011-12.”
The company’s net profit for the full year ended 31 March 2012 increased 1.82% to Rs104.64 crore, as against Rs102.76 crore in the year ago period.
Its net sales grew 17.79% to Rs573.82 crore in 2011-12, compared to Rs487.12 crore in the previous fiscal.
During the 2011-12, the company added properties at 10 new locations including Sikkim, Mussorie, Mahabaleshwar, Kumarakom, Jaisalmer, Kanatal, Goa and Rishikesh.
“In the last one year we have expanded very aggressively and will continue to do so going ahead,” Mr Sawhney said.
During the year, it strengthened customer-centric efforts and launched an online booking facility on its website.
“Within a very short period of time, 13% of all bookings are now being done online,” he said.
A part of $14.4 billion Mahindra Group, the company operates in the leisure hospitality segment with a network of 42 resorts across India through vacation ownership memberships.
While Club Mahindra is the flagship brand, the other brands offered by the company are Zest Breaks, Club Mahindra Fundays, Mahindra HomeStays and Mahindra Travel.
The company’s board of directors have recommended dividend of Rs4 per equity share of Rs10 each.
In morning trade, Mahindra Holidays and Resorts was trading at around Rs293 per share on the Bombay Stock Exchange, 0.05% down from the previous close.