Draft Regulations for Coaching Institutes

In the current scenario, the government is engaged in discussions regarding the formulation of guidelines to regulate deceptive advertisements and false claims within the coaching sector.

The Central Consumer Protection Authority (CCPA) recently convened the inaugural meeting of the Committee tasked with crafting these guidelines. The imperative for such guidelines arises from the CCPA issuing notices to 31 coaching institutes for misleading advertisements, resulting in fines imposed on 9 of them.

The proposed guidelines are designed to be universally applicable, encompassing both online and physical coaching institutes, and are intended to address all forms of advertisements across various formats and mediums. The definition of misleading advertisements is drawn from the Consumer Protection Act of 2019, encompassing actions such as concealing vital information pertaining to the courses selected by successful candidates.

• To prevent consumer misunderstanding and safeguard consumer autonomy, coaching institutes are prohibited from making false claims regarding success rates, selection numbers, or engaging in any practices that may subvert consumer choice. The guidelines outline specific do's and don'ts for creating advertisements, including the mandatory inclusion of essential information alongside successful candidate photos, such as the secured rank, chosen course, and course duration, clearly distinguishing between paid and free courses.

Coaching institutes are explicitly barred from asserting 100% selection, 100% job guarantees, or guaranteed preliminary or mains success. The guidelines further prescribe that disclaimers or crucial information should be presented in the same font as the main advertisement, with their placement in a prominent and visible position.

Any misleading advertisement by coaching institutes will be subject to penalties as per the provisions of the Consumer Protection Act of 2019. The CCPA, established in 2020 under the Consumer Protection Act of 2019, holds the central responsibility of promoting, protecting, and enforcing consumer rights. Empowered to investigate and take action against unfair trade practices, misleading advertisements, and violations of consumer rights, the CCPA can impose penalties on entities or individuals found guilty of unfair trade practices, contributing to the overall goal of ensuring fair trade practices and protecting consumers from deceptive business practices.

The Guidelines shall be applicable to all the coaching institutes whether online or physical and cover all forms of advertisement regardless of form, format or medium. The Guidelines prescribe conditions when an advertisement by a coaching institute shall be construed to be misleading advertisement as defined under the Consumer Protection Act 2019 which inter-alia include concealing important information related to the course opted by the successful candidates [courses opted by successful candidates (whether free or paid), duration of course etc.

The Guidelines also provide that coaching institutes shall not make false claims regarding success rates or number of selections and any other practices that may lead to consumer misunderstanding or subvert consumer autonomy and choice.

The guidelines also prescribes DO’s and DON’T’s that need to be observed before coming up with advertisements:-

1. Coaching Institute shall mention requisite information with successful candidate photo:-

• Rank secured by successful candidate

• Course opted by successful candidate

• Duration of course

• Whether it is paid or free

1. Coaching institutes shall not make claim 100% selection or 100% job guaranteed or guaranteed preliminary or mains.

2. The font of disclaimer/Disclosure/Important information in the advertisement shall be the same as that used in the claim/advertisement. The placement of such information shall be at a prominent and visible place in the advertisement.

It was also clarified that penalty for misleading advertisement by coaching sector will be governed as per Consumer Protection Act, 2019 and the Guidelines are just in the nature of clarification to the stakeholders and violations of the provisions of the Consumer Protection Act 2019 shall continue to be governed under the existing provisions of the Consumer Protection Act 2019.

The Committee observed that there is an urgent need to issue the Guidelines and the Draft as discussed in the Meeting should be issued at the earliest.

CCPA had taken sou moto action against misleading advertisement by coaching institutes. In this regard, CCPA has issued notices to 31 coaching institutes for misleading advertisement and imposed fine on 9 of them for misleading advertisement.

CCPA has observed that some of the coaching institutes mislead consumers by deliberately concealing important information with respect to course opted by successful candidates, duration of the course so attended & the fees paid by the candidates.

CCPA also observed that some of the coaching Institutes also indulge in making claims like 100% selection, 100% job guaranteed and guaranteed preliminary and main examination without providing verifiable evidence.

What is CCPA ?

The Central Consumer Protection Authority (CCPA) is a regulatory body in India established under the Consumer Protection Act, 2019. It's responsible for protecting and enforcing the rights of consumers across the country. 

Here are some key functions of the CCPA:

• Investigating consumer complaints: The CCPA can investigate complaints related to unfair trade practices, misleading advertisements, and defective goods or services.

• Issuing orders: The CCPA can issue orders to stop unfair trade practices, recall defective products, and impose penalties on violators.

• Raising consumer awareness: The CCPA can also raise consumer awareness about their rights and responsibilities through various initiatives.

Some recent actions taken by the CCPA include:

• Issued notices to e-commerce platforms for unfair trade practices related to cancellation and return policies.

• Imposed penalties on misleading advertisements by celebrities and influencers.

• Launched a campaign to educate consumers about their rights when dealing with online service providers.

The CCPA has played a significant role in strengthening consumer protection in India. It has helped to deter unfair trade practices, improve product quality, and ensure that consumers are treated fairly.

Here are some additional facts about the CCPA:

• It was established on July 24, 2020.

• It is headquartered in New Delhi.

• It is headed by a Chief Commissioner, who is appointed by the central government.

I hope this information is helpful. Please let me know if you have any other questions.

Refrence: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1994532