CCPA slaps Rs 54.6 lakh fine on 48 coaching centres, issues new norms to curb misleading ads

The Central Consumer Protection Authority (CCPA) has slapped a fine of Rs 54.6 lakh on 18 coaching institutes for misleading advertisements and issued comprehensive guidelines to address malpractices in the coaching sector. The 'Guidelines for Prevention of Misleading Advertisement in the Coaching Sector, 2024,' aims to safeguard students and the public from deceptive marketing practices commonly employed by coaching centres, Nidhi Khare, Chief Commissioner CCPA and Secretary, the Department of Consumer Affairs told journalists on Wednesday.

The guidelines explicitly prohibit coaching institutes from making false claims related to the following:

• The courses offered, their duration, faculty qualifications, fees, and refund policies.
• Selection rates, success stories, exam rankings, and job security promises.
• Assured admissions, high exam scores, guaranteed selections or promotions.

The guidelines stipulate that coaching institutes must accurately represent their infrastructure, resources, and facilities. Misleading representations about the quality or standard of their services are strictly prohibited.

In a notable move, the guidelines bar coaching centres from using students' names, photos, or testimonials in advertisements without their written consent -- and importantly, this consent must be obtained only after the student's success. This provision is intended to reduce the pressure students face when enrolling, as they are often pushed into signing such agreements upfront.

Coaching centres will need to disclose important information, such as the name, rank, and course details alongside the student's photo in an advertisement. Whether the course was paid for by the student that, too, must be clearly stated. Additionally, any disclaimers will need to be prominently displayed, with the same font size as other important details, ensuring that consumers are not misled by the fine print.

The guidelines also target the common tactic used by any person engaged in coaching i.e. creating a false sense of urgency or scarcity, such as implying limited seats or exaggerated demand, to pressure students into making an immediate decision.

Every coaching centre will also be required to partner with the National Consumer Helpline, making it easier for students to raise concerns or complaints regarding misleading advertisements and unfair trade practices.

Any violation of these guidelines will be treated as a contravention of the Consumer Protection Act, 2019. The Central Authority has the power to take stringent actions against offenders, including imposing penalties, ensuring accountability, and preventing further occurrences of such deceptive practices.

Khare emphasised that CCPA seeks to work closely with industry stakeholders, consumer organisations, and regulatory bodies to ensure effective implementation and compliance with the guidelines in the interest of consumers and the public.

She further stated that misleading advertisements in the coaching sector will be governed as per the Consumer Protection Act, 2019 and the guidelines will bring clarity to the stakeholders and protect consumer interests.

These guidelines are a crucial step in preventing the exploitation of students and ensuring that they are not misled by false promises or compelled into unfair contracts benefiting both consumers and the broader educational ecosystem, she said.

These guidelines will be in addition to any existing regulations, enhancing the overall regulatory framework governing advertisements in the coaching sector, she added.

Khare also said that CCPA had taken suo motu action and issued 45 notices to various coaching centres for misleading advertisements. The CCPA has imposed a penalty of Rs 54.6 lakh on 18 coaching institutes and directed them to discontinue the misleading advertisements.