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New Delhi: 'Mutual funds are subject to market risks, please read the offer document carefully before investing’. A majority of us have missed this disclaimer, sometimes because it was said too fast, or at other times written in an illegible font and size.

Mutual funds industry is not the only one which issues disclaimers in advertisements that confuse consumers. Many companies across the board that either show stunts or have to explain the contents of their products or claims use disclaimers in advertising. While these disclaimers have defined guidelines, it was found that in the last three years, over 800 advertisements processed by the self-regulatory body, the Advertising Standards Council of India (ASCI), were in violation of its guidelines.

In its survey, in which the council spoke to 130 consumers, it said about 80% did not notice the disclaimer at all. Another 33% could not understand it clearly even after adequate exposure time had been provided, and 62% of respondents felt that the disclaimer was excessively long. It was also found that the frame of the advertisement that contains the disclaimer was also very crowded, and distracted the viewer’s focus.

To act on such violations, the council has updated its guidelines which otherwise also require that suitable disclaimers must be used to properly explain and support claims made in these advertisements to ensure that consumers can read all the information presented.

Manisha Kapoor, CEO and secretary general of the council said, “While we had disclaimer guidelines since 2016, it was observed that over-use of disclaimers also made it difficult for consumers to understand all the information presented. Additionally, claims must be crafted in a way that minimises the need for qualificatory disclaimers and where disclaimers are needed, they should be presented in a manner that someone who is interested in reading them has the opportunity to do so."

Companies will now have to ensure that the use of the disclaimer should be kept to a minimum, avoiding long and complex ones with large blocks of text and difficult words which can be a deterrent to viewers attempting to read them.

Hold duration and readability of disclaimer - in television commercials or any other video advertisement on digital media, all disclaimers should be clearly readable to consumers. 

It added that there should not be more than one disclaimer and it should be restricted to two full-length lines and remain on screen for four seconds for every line.

ABOUT THE AUTHOR

Varuni Khosla

Varuni Khosla is a journalist with close to 14 years of experience in writing business news stories for mainstream newspaper companies like Mint and The Economic Times. She reports and writes on luxury and lifestyle brands, hospitality and tourism news, the business of sports, the business of advertising and marketing and alcohol brands.
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