Protecting Consumers: FPCE Urges Action Against Deceptive Real Estate Advertising

Homebuyers’ Body Calls for Stringent Guidelines Against Misleading Real Estate Ads

A nationwide homebuyers’ organization has urged the Consumer Affairs Department to implement targeted guidelines for real estate advertising. This appeal comes in the wake of findings from the Advertising Standards Council of India (ASCI), which revealed that 34% of the examined real estate advertisements were misleading. The organization has criticized the penalties imposed by Maharashtra RERA as insufficient, averaging only Rs 14,000-15,000, to deter violations effectively.

Real Estate Advertising: A Growing Concern

Key Findings:

1. High Rate of Misleading Ads: ASCI identified 34% of real estate advertisements from April to September as non-compliant with legal standards in Maharashtra.
2. Limited Scope of Review: ASCI’s assessments were based on parameters provided by MahaRERA. According to the Forum for People’s Collective Efforts (FPCE), this scope is inadequate from the consumer’s perspective. They claim that a consumer-centric review would expose almost all advertisements as misleading.
3. Compliance Challenges: Out of 2,115 advertisements screened, 1,027 were found to be misleading. Advertisers responded to these findings in 59% of cases, either modifying or withdrawing the ads.

Call for Action

The FPCE has highlighted these findings in a letter to the Consumer Affairs Department, emphasizing the need for robust and consumer-focused guidelines to safeguard homebuyers.

Penalty Concerns

• Ineffective Fines: ASCI flagged 628 non-compliant ads to MahaRERA, which imposed penalties totaling Rs 88.9 lakh. However, the average penalty of Rs 14,000-15,000 per developer is considered insufficient to discourage repeat offenses.
• Impact on Accountability: The FPCE argues that the current penalty system lacks the necessary deterrent effect, allowing developers to continue misleading practices without significant repercussions.

Recommendations for Improvement

To ensure better protection for homebuyers, the FPCE has suggested the following measures:

1. Stronger Guidelines: Targeted, clear, and enforceable rules for real estate advertising should be established, ensuring transparency and accuracy in all promotional materials.
2. Higher Penalties: Penalty amounts should be significantly increased to discourage violations and foster accountability among developers.
3. Consumer-Centric Monitoring: Advertisement screening should prioritize consumer interests, ensuring that critical information, such as registration numbers and QR codes, is disclosed.

Important Points to Address

1. Standardized Disclosure Norms:
   • Mandatory registration numbers.
   • Use of QR codes for quick verification.
   • Clear mention of all essential property details.
2. Independent Oversight: An independent regulatory body or enhanced role for ASCI could ensure unbiased monitoring and evaluation of advertisements.
3. Consumer Awareness Campaigns: Educating homebuyers on their rights and the red flags of misleading ads could empower them to make informed decisions.
4. Collaborative Efforts: Regular collaboration between ASCI, RERA, and consumer advocacy groups to streamline compliance and enforcement.

The FPCE’s call for stronger guidelines and enforcement mechanisms is a crucial step toward curbing misleading real estate advertising. By prioritizing transparency and accountability, these measures could provide much-needed protection for homebuyers and restore trust in the real estate sector.