Self-regulation by ASCI is any day better than an official regulator for advertisements
Self-regulation can work quite effectively to curb false and misleading advertisements, even when an impromptu committee of socially-conscious citizens is put together to decide complaints. Marketing and advertising expert Paritosh Joshi demonstrated this most effectively at a Moneylife Foundation seminar on how to hold irresponsible advertisers accountable. “The advertising code revolves around just four words—truthful, decent, safe and fair—to decide whether an advertisement is appropriate,” he instructed the committee drawn from the audience. Despite strong differences in sensitivity, perception and attitudes of the audience, decisions by this group mirrored the view of ASCI’s (Advertising Standards Council of India) official committee, in most cases.
This is significant because, every year, the ministry of consumer affairs (MCA) threatens to set up a government regulator to monitor advertising. Advertisers and agencies believe, with good reason, that bureaucratic, censor-board-like clearances will lead to delays and corruption. It was clear from the programme that an independent committee, using common sense, could be just as effective in holding advertisers accountable without any knowledge of the ASCI code. Remember, the withdrawal of an expensive advertising campaign, especially one that has celebrity endorsements, imposes a massive financial cost on the advertiser. A strong code is a good deterrent.
Unfortunately, consumer organisations and academics, often the beneficiaries of financial grants from the ministry, tend to back the MCA in asking for an advertising regulator. Do we need another censor board for advertising? The common-sense answer would be a resounding ‘No’. In the past couple of years, ASCI has, indeed, worked hard to increase its reach through suo moto action and an independent monitoring mechanism to catch false and irresponsible advertising with a special focus on education ads, dubious medicines and slimming products. But a lot more needs to be done.
ASCI still attracts criticism for dragging its feet on issues that affect its large advertisers. It also does not cover financial advertising, where misleading claims and calculations are subtler. Three specific areas that ASCI needs to address are:
• Disclaimers continue to be unreadable. The text of these disclaimers must also be made available to complainants on request, at least by email. Similarly, complainants must be given access to research reports that form the basis of specific positive claims made in advertisements (15% whiter, 3.5x stronger, twice as soft, etc). This is important because, very often, the results have been found misleading or based on unreliable sources and unrecognised authorities. While these usually become the subject of intra-industry disputes, there is no reason to deny the information to complainants within a specific timeframe.
• ASCI’s biggest weakness is its reluctance to act against repeat offenders or habitual offenders. These are usually large multinational companies who are hard-pressed to substantiate the claims of their fairness creams or promise of flawless complexions, anti-pimple remedies or even nutrition products aimed at children. Many believe that the companies have worked out a neat routine of carpet-bombing a new advertising campaign, knowing full well that it will lead to consumer complaints (at least from competitors) which will be upheld and force the withdrawal of the campaign in about six weeks. The next campaign, cynically, makes a new set of unsubstantiated claims that are again upheld. If ASCI fails to respond to demands to step up action against powerful repeat-offenders, it will continue to face the charge of being a weak regulator and the constant threat of the greater evil of a government regulator being set up.
Ihave heard heads of mutual funds say that proper investor...
RBI’s order to withdraw all currency notes of pre-2005 creates confusion that could be easily avoided
In a positive move, the Reserve Bank of India (RBI) has decided to mop up currency notes with lower security features which have been widely counterfeited. But the way it went about it caused a burst of initial panic. RBI needs to learn that issues which impact the aam aadmi need clear and comprehensive communication rather than bureaucratic circulars followed by multiple clarifications. Now, here are some facts that should have been communicated along with the mid-January circular to withdraw currency printed prior to 2005 (where the notes do not mention the year of printing and have less security features and, hence, are widely counterfeited).
First, RBI’s CVPS (currency verification & processing system) machines have already been withdrawing pre-2005 notes for nearly a year. The new circular is only to mop up the residual notes. This was one of the measures to counter the large number of sophisticated counterfeit notes which can be detected by only CVPS machines. It is, however, unclear why the exercise includes Rs10, Rs20 and Rs100 notes, where counterfeit or fake notes are of poor quality and easier to detect.
RBI had initially instructed banks to exchange notes only after 31st March and this set off panic among users when uninformed shopkeepers and taxi-drivers refused to accept old notes. Immediately, a brisk business of exchanging pre-2005 notes at a 2% commission sprang up in Mumbai, as reported by a local daily. Following a clarification by RBI, banks are now exchanging pre-2005 currency without a murmur. Our sources also tell us that bank ATMs will not dispense old currency notes.
By announcing a positive and pre-planned move on the eve of a general election, without adequate public information, RBI caused needless confusion. Governor Raghuram Rajan had to use his post-credit policy press briefing on 28th January to clarify that the currency clean up was not aimed at catching tax-evaders or attacking black money. RBI still needs to put in place a communication strategy to reach out to 300 million-plus unbanked Indians who deal only in cash. A radio campaign in local languages and a programme to work with banking correspondents to facilitate the mop up of old currency must be put in place well before 31st March to avoid another round of confusion and exploitation of those who have limited means.