Are celebs responsible for the investments they endorse?

Recently, a group of homebuyers sought remedy by embarrassing the celebrity endorser of the real estate project they had invested in on social media. Indian cricket team captain M.S. Dhoni, who prominently featured in the ads for the project, found himself embroiled in their ire.

The social media campaign was powerful enough to make him terminate his endorsement contract with the Noida-based builder, Amrapali Group. It also caught the attention of a parliamentary standing committee on food, consumer affairs and public distribution, which has proposed stringent provisions to regulate celebrity endorsements. The recommendations include fines up to 50 lakh or a jail term of up to five years.

Here is what happened in the instance mentioned above involving Dhoni. Homebuyers in Amrapali’s Sapphire project in Noida aired complaints on Twitter earlier this month. They used the hashtag #amrapalimisusedhoni, in which they pulled up Dhoni for enticing buyers. According to online property sites, the launch date of the project varies from July 2009 to October 2011, but there are no details on the launch date and date of possession on the builder’s website. Twitter feeds for this hashtag suggest delay in possession and also basic facilities left unfinished.

According to Twitter feeds, Dhoni’s official response was to say that whatever was promised by the builder should be met. Soon after, though, he quit as the brand ambassador for the builder. Owners tweeted that running away from the problem did not absolve him of his moral responsibility.

This is where the debate begins. Is he accountable for what the builder does? Does he at least have the moral responsibility to understand the product better? Don’t celebrity endorsements necessitate a better framework of due diligence? Do buyers have legal recourse for relying on such advertisements?

Given that celebrities are emulated as demi gods and goddesses, ideally they should be held responsible for products they endorse.

The brief ban on Maggi noodles had an implication for its celebrity endorsers. Brand ambassadors Amitabh Bachchan, Madhuri Dixit and Priety Zinta were embroiled in legal dalliance due to a public interest litigation. The Maggi ban was later removed. Not so long ago, Amitabh Bachchan stepped back from promoting Pepsi after a school girl questioned the health impact of the drink.

The pending Consumer Protection Bill, 2015, enumerates some consumer rights, one of which is being informed of the quality, quantity, potency, purity, standard and price of goods or services.

But is it just the manufacturer or all others involved in promoting a product who should be held responsible? And do celebrities, because of their ability to reach out to potential buyers, have a greater responsibility to validate the products they endorse?

Let’s think about some other things that celebrities endorse. Electronic goods, for example. Would you have bought a Samsung phone because actor Aamir Khan promoted it? Or switched to Dish TV at Shah Rukh Khan’s behest? (The two celebrities were associated with the said brands for several years.) No doubt the ad will attract you, but it’s unlikely that you will buy the product unless you have seen it and tested it.

Dhoni’s Twitter timeline on 10 April read: “Proud to be associated with Lava, a truly reliable Indian brand....” Is this enough to tilt the scales for a sale?

With real estate, you mostly can’t touch, feel or examine the flat before buying. There are many risks attached to a property that’s under construction—non-completion is one of them. Sure Dhoni couldn’t know about delayed delivery in advance, but could he have made basic checks on how the builder plans to complete the project? Cashflow, and number of projects already under construction are things that could have been asked before hand.

Buying a house is not the same as buying electronics which come with manufacturer’s guarantee, or even junk food (which gets its share of celebrity endorsements) where the downsides are common knowledge. Buying financial products and real estate is more nuanced and, hence, advertisements alone shouldn’t be your guiding light. Consumers need to be more discerning in such cases. At the same time, endorsers, too, ought to have some accountability.

The Federal Trade Commission of the US has laid down some endorsement guidelines for celebrities. Among other things, it says the endorsement has to represent the accurate experience and opinion of the endorser.

In Indian financial services, marketing and distribution of one product—mutual funds—has taken a defined route towards seller beware. So, it is the responsibility of the manufacturer and the distributor to ensure a good fit with the investor. The new real estate bill, too, leans in this direction, but does not say anything about accountability of celebrities involved in advertisements.

Some argue that Dhoni is a cricketer and that there is nothing to suggest that he has a better understanding of buying a flat than any of us. What’s to say that he isn’t endorsing this because he liked the sample flat. But that isn’t a good enough excuse to escape accountability. Even if official guidelines are not crafted, it’s not unfathomable that the market place itself might change the way we consider celebrity endorsements. Social media will make it increasingly hard for celebrities to avoid responsibility and claim.

Advertising agencies pick celebrities because their fan following ensures more eyeballs. This is exactly why the group of Amrapali flat owners also chose to tag Dhoni on Twitter.

Public figures have an ethical obligation towards those who follow them and this necessitates a framework that guides them to take responsibility for their public image, which includes the products they endorse. Moving in and out of paid contracts might be a solution for the celebrity endorser but it doesn’t erase the impact of their previously branded image.