CCPA to coaching centres: No false promises or unconsented testimonials

The Central Consumer Protection Authority (CCPA) has introduced new guidelines to curb misleading advertisements in the coaching sector, ensuring transparency and consumer protection. The CCPA has taken suo moto action against 45 coaching centres and imposed a total penalty of ₹54.6 lakh on 18 institutes for misleading advertisements in recent years.

From a ban on false promises like guaranteed admissions or job security to the use of student testimonials without consent, the ‘Guidelines for Prevention of Misleading Advertisement in Coaching Sector, 2024’ apply to any establishment that imparts education to more than fifty students.

Earlier in February, the CCPA received feedback on its draft guidelines from over 28 stakeholders, including coaching institutions such as ALLEN Career Institute, FIITJEE, and Career360, as well as organisations like the Ministry of Education, Bureau of Indian Standards (BIS), India EdTech Consortium, and the Consumer Education & Research Centre (CERC).

The guidelines define misleading advertising by coaching centres as making false claims about course details, faculty credentials, fees, and refund policies, misrepresenting success rates, and exam rankings, or offering guarantees like job security or admissions. They also include falsely portraying service quality or creating a false sense of urgency to pressure consumers into hasty decisions.

Additionally, the guidelines lay out the needed obligations coaching centres are expected to be bound by which include, that advertisements must disclose key details such as course duration, rank achieved, whether the course is paid for, and include the student's photo. Disclaimers and important information must be clearly visible in the same font size as the main claims. Further, coaching centres must accurately represent their facilities, services, and any relevant approvals, like from AICTE or UGC and cannot use student testimonials, photos, or videos without written consent, which must be obtained after the student’s selection.

Violations of these guidelines will be treated under the Consumer Protection Act, 2019, with the CCPA authorised to impose penalties. Fines for false or misleading advertisements can reach ₹10 lakh for the first offence, escalating to ₹50 lakh for subsequent violations. Repeat offenders may also face a three-year ban on endorsing any product or service.

The guidelines also require coaching centres to partner with the National Consumer Helpline to streamline student complaints regarding misleading ads and unfair practices.

Complaints through the National Consumer Helpline have increased by 45% since 2021-22, reflecting both rising issues among entrance exam aspirants and growing trust in the grievance redressal system. So far in 2024, 6,980 students have sought resolution through NCH, though the government release did not specify how many complaints were resolved.

In response to increasing complaints about unfair practices, particularly non-refund of enrolment fees by coaching centres, NCH launched a mission-mode initiative to resolve these issues, the government stated in a press release. Nidhi Khare, chief commissioner, CCPA held a press conference on Wednesday to announce this initiative.

Between September 2023 and August 2024, the helpline facilitated ₹1.15 crore in refunds to affected students nationwide, addressing grievances efficiently at the pre-litigation stage.