The Consumer Protection Act, 2019 fundamentally reshapes the legal position of brand endorsers by recognising endorsements as influential commercial communications capable of misleading consumers. Under Section 2(18), endorsements include any representation—verbal, visual, or symbolic—that conveys personal opinion or credibility, while Section 21 empowers the Central Consumer Protection Authority to penalise endorsers for false or misleading advertisements. Endorsers may face fines up to ₹10 lakh and temporary bans from future endorsements if advertisements are deceptive or prejudicial to consumer rights. However, the law draws a crucial distinction between regulatory liability and civil liability for contractual breaches by brands. Courts have clarified that endorsers cannot be held liable for deficiency of service unless a direct transactional link or knowing participation in deception is established. The statutory defence of due diligence protects endorsers who can demonstrate reasonable verification of claims. Thus, while celebrity promotions are no longer immune from scrutiny, liability is calibrated to balance consumer protection with fairness to endorsers.
Liability of Brand Endorser
Have you ever contemplated the legal exigencies and the attendant liability of an endorser—specifically the high-profile protagonists featured in mass media—when the commercial representations they broadcast fail to align with the actual efficacy or cost of the product?
Consider, for instance, a promotional campaign where a celebrated personality pledges a comprehensive pilgrimage to the Magha Mela for a fixed consideration of 1,0000 rupees, ostensibly inclusive of all ancillary expenditures such as lodging and transit. Should a consumer, having acted upon this inducement, be subsequently coerced into making supplementary payments, such an act constitutes a flagrant departure from the advertised covenants.
In such a contingency, while the brand’s culpability for a material breach of contract is axiomatic, a more nuanced juridical question arises: does the liability of the endorser extend beyond the mere histrionic performance, or can they be held personally liable for the deceptive nature of the claims? To adjudicate this, one must examine the statutory framework of the Consumer Protection Act, 2019, which serves as the primary legislative instrument governing the obligations of service providers and the restitution of consumer rights.
What is an endorsement and who is endorser-
Pursuant to Section 2(18) of the Consumer Protection Act, 2019, the term “endorsement” in the context of commercial communication is meticulously defined. It encompasses any communicative act that leads a consumer to believe it reflects the bona fide opinion, findings, or personal experience of the individual or entity involved. This statutory ambit includes:
Any express message, verbalized statement, or physical demonstration intended to promote a product or service;
The depiction of an individual’s name, signature, likeness, or other identifiable personal characteristics;
The use of a seal, name, or insignia of any institution or organization, thereby lending institutional credibility to the advertisement.
Consequently, any individual who lends their public persona to these activities is legally classified as an endorser. Whether it be a legendary athlete like Sachin Tendulkar advocating for financial instruments or a global icon like Virat Kohli representing a premier sportswear brand, their involvement transcends mere performance. Under this legislative framework, they are recognized as endorsers of the enterprise, assuming a role that carries significant regulatory weight and potential civil liability.
Liability of Endorsers-
Section 21 of the Act serves as the operative provision that delineates the parameters of an endorser’s liability, distinguishing between mere artistic performance and actionable negligence. An endorser may be held personally liable and subject to penal sanctions if the advertisement is found to be:
- Factually False or Demonstrably Misleading;
- Prejudicial to public policy or interest;
- In contravention of established consumer rights.
The Central Consumer Protection Authority (CCPA), acting as the competent regulatory body, is vested with the power to adjudicate these matters. Upon finding a violation, the Authority may issue a directive for immediate discontinuation or modification of the offending advertisement. Furthermore, if the Authority deems it necessary to deter future malfeasance, it may impose a pecuniary penalty extending up to ten lakh rupees. In addition to such fines, the CCPA may exercise its discretionary power to proscribe the endorser from participating in any commercial endorsements for a period of one year—a prohibition that may be extended to three years for subsequent recidivism
Due diligence
However, the Act provides a statutory shield for the endorser An individual shall not be held liable for such penalties if they can establish that they acted with reasonable circumspection. Specifically, under sub-section (5), immunity is granted if the endorser has exercised due diligence to verify the veracity of the claims. This implies that the endorser must not have knowingly or willfully participated in a deception. If they can demonstrate that they took proactive measures to validate the product’s efficacy before lending their name to it, they may be absolved of statutory culpability.
Real life example-
Actor Mohan Lal vs. State of Kerala-
The petitioner, a prominent film actor and brand ambassador for M/s Manapuram Finance, challenged orders from the District and State Consumer Commissions which upheld the maintainability of a consumer complaint against him. The original complainants alleged that they were induced to pledge gold ornaments based on media advertisements featuring the petitioner, which promised an interest rate of 12% per annum. However, upon attempting to close the loan, they were allegedly coerced into paying a significantly higher rate, leading to a claim for refund and Rs. 25 Lakhs in compensation for mental agony and deficiency of service.
The core juridical question was whether a brand endorser can be held liable for “Unfair Trade Practices” under Section 2(47) simply by appearing in an advertisement. The petitioner contended that his role was limited to a theatrical representation and that an endorser’s liability is strictly governed and limited by Section 21 of the Consumer Protection Act, 2019—which pertains to regulatory penalties imposed by the Central Authority—rather than direct civil liability for a brand’s contractual breaches.
The High Court of Kerala observed that while Section 2(18) defines “endorsement,” the term “endorser” appears exclusively within Section 21. The Court ruled that for an endorser to be held liable for a brand’s deficiency of service or unfair trade practices, a direct link must be established between the endorser and the specific transaction.
The Court noted that the complainants failed to demonstrate that they were directly persuaded by the petitioner; rather, they were misled by the service provider’s failure to honor the advertised rates. Consequently, the Court held that a celebrity cannot be mulcted with liability merely for their status as a brand ambassador unless they were privy to the transaction.
Justice Ziyad Rehman A.A. quashed the impugned orders, declaring the complaint non-maintainable against the petitioner. However, it reserved the right of the complainants to pursue the brand and clarified that they could still approach the Central Authority under Section 21 if they sought to challenge the veracity of the advertisement itself.
Conclusion-
The Consumer Protection Act, 2019, has effectively dismantled the era of unaccountable celebrity promotion. By defining “endorsement” under Section 2(18) and prescribing punitive exactions under Section 21, the legislature has elevated the endorser from a mere performer to a statutory fiduciary of public trust.Yet, as the Manappuram Finance precedent clarifies, this liability is not absolute. The judiciary maintains a vital distinction between a brand’s operational breach and an endorser’s deceptive representation. An endorser is shielded from civil liability unless a “direct link” to the transaction is proven, provided they have exercised due diligence regarding the claim’s veracity.
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