Coaching centres play a crucial role in helping students prepare for competitive exams and improve academic performance across various levels. These centres offer specialized programs that go beyond traditional classroom instruction, providing expert guidance and structured learning frameworks. However, many coaching centres have faced criticism for their commercialization, often using marketing strategies that mislead prospective clients about their success rates and the effectiveness of their programs.
In the interest of ensuring transparency in the coaching sector as well as to address the issue of misleading advertisement plaguing the coaching sector in India, the Central Consumer Protection Authority (“CCPA”) published Guidelines for Prevention of Misleading Advertisement in Coaching Sector, 2024 (“Coaching Guidelines”). It is pertinent to note that the Coaching Guidelines are in addition to and not in derogation of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (“Misleading Advertisement Guidelines”) which covered all sectors, including the coaching industry. The introduction of the Coaching Guidelines has increased the ambit of the term “misleading advertisement” by making persons, who have established, run, administer coaching centre, or provide coaching responsible, liable for “misleading advertisement” if they:
- make false claims regarding the course offerings, duration of completion, faculty credentials, and fees, course exit policy including fee-refund;
- make false claims regarding number of selections, rank in exam or success rate;
- make false claims such as guaranteed selection, job security, job promotions, salary increase, success at different stages of an examination, admission to any institution or lead the consumer to believe that enrolment in coaching will ensure a good rank, high marks;
- falsely represents that the services are of a particular standard or quality;
- create a false sense of urgency including falsely stating or implying the sense of urgency or scarcity showing false popularity of goods or services to mislead a person into making an immediate purchase or require taking an immediate action;
- engage in any other unfair trade practice or misleading advertisement.
It is imperative to note that the term “unfair trade practice” or “misleading advertisement” have been defined under the Consumer Protection Act, 2019.
The Coaching Guidelines specifically provide that any person who is engaged in coaching while making an advertisement is obligated to disclose important information such as rank secured, name and duration of course, whether such course is paid with the candidate’s photograph. With regards to disclaimers, the Coaching Guidelines specifies that the advertiser shall display disclaimer and any other important information prominently with the font of disclaimer and important information in the advertisement being the same as that in the advertiser’s claim. Moreover, the advertisers are obligated to maintain transparency in making an advertisement and to accurately represent the service, facilities, resources, and infrastructure of the coaching center. The advertisers are also obligated to truthfully represent, if applicable, that the course(s) offered are duly recognised and have the approval of a competent authority such as All India Council for Technical Education, University Grants Commission, etc. The Coaching Guidelines also encourage every coaching center to become a partner in the convergence process of the National Consumer Helpline of the Central Government. The Coaching Guidelines specifies that any person who is engaged in coaching shall not use name, photographs, testimonial, or videos of successful candidate in an advertisement without candidate’s written consent which shall be taken after the selection. The abovementioned ensures that the students and their families are not misled by vague, misleading, or overly optimistic advertisement.
Despite the positive aspects covered under it, the Coaching Guidelines exhibit significant gaps which are as follows:
A. Offline and/or Online – It is noteworthy that on 8th January 2024, the CCPA while conducting its first meeting on the draft guidelines with respect to the misleading advertisements in coaching, stated that “The Guidelines shall be applicable to all the coaching institutes whether online or physical and cover all forms of advertisement regardless of form, format or medium”. However, the Coaching Guidelines fail to make a mention of the term “online”. The absence of this term raises significant concerns as it implies exclusion of coaching centres having online existence from the ambit of the Coaching Guidelines. To address this, it is essential that the Coaching Guidelines are updated to address misleading advertisement for offline and online coaching institutes as the digital platform has become a dominant platform for imparting coaching related services. In case this rectification is not done, it is entirely possible that coaching institutes may misuse this regulatory gap to escape the applicability of Coaching Guidelines by introducing their services on digital platform.
B. 50 Student threshold - The Coaching Guidelines define the term “Coaching Center” as “includes a center, established, run, or administered by any person(s) for providing coaching to more than fifty students”. The floor threshold of 50 students presents a major loophole to the Coaching Centres as the Coaching Centres may structure their courses in short batches with fewer than 50 students at any given time, thereby circumventing the regulations. A better approach would be to focus on overall capacity, resources, or revenue generation to capture all forms of coaching operations rather than a minimum number of students.
C. Endorsers and their role – A perusal of Para 1 (3) of the Coaching Guidelines states that “These guidelines shall apply to all forms of advertisements by any person including an endorser engaged in coaching sector.” However, the remaining provisions of the Coaching Guidelines address those who establish, run, administer, or provide coaching. Consequently, the reason for including “endorsers” within the ambit of the Coaching Guidelines remains unclear. This lack of clarity leaves room for endorsers to escape liability for misleading advertising under the Coaching Guidelines thereby undermining the effectiveness of the guidelines in curbing deceptive practices in coaching sector.
D. Absence of refund mechanism: One of the key concerns in the coaching sector is the non-fulfilment of promises made in advertisements. This raises consumer grievances which can only be adequately addressed only via refunds. The Coaching Guidelines should be updated to require that the coaching institutes establish standardized refund procedures in cases where advertisements do not match the outcomes offered. These procedures should be clearly communicated in the advertisements to avoid misunderstandings and financial disputes.
E. Consent requirements: It is noteworthy that Para 4 (2) of the Coaching Guidelines provides that “Any person who is engaged in coaching shall not use name, photographs, testimonial or videos of successful candidate in an advertisement without candidate’s written consent. The consent in this regard shall be taken subsequent to the selection.”. However, the provision appears to be incomplete as it does not provide for process in which such consent is to be obtained or how such personal data / documents of the students are to be maintained by the coaching centres or what is the period till which such consent shall be valid etc. In light of the above, the Coaching Guidelines shall be updated to include a consent obtaining and data processing procedure or to specify that the procedures available under the applicable laws dealing with personal data shall apply herein.
F. Occasional or Unintentional lapse: It is interesting to note that in 2022, Para 4 (2) of the Misleading Advertisement Guidelines recognized the possibility of “occasional or unintentional lapse in the fulfilment of an advertised promise or claim” which may occur while carrying out mass manufacture and distribution of goods, products, and services. As a remedy to this, the Misleading Advertisement Guidelines stated that specify that such unintentional lapse may not invalidate the advertisement “provided (a) such promise or claim is capable of fulfilment by a typical specimen of the product advertised; (b) the proportion of product failures is within the generally acceptable limits; (c) the advertiser has taken prompt action to make good the deficiency to the consumer.” However, considering the absence of similar provisions relating to “occasional or unintentional lapse in the advertised promise or claim” from the Coaching Guidelines (which came two years after the Misleading Advertisement Guidelines), it is unclear if persons who have established, run, administer coaching centre, or provide coaching can or cannot benefit from the relief available under the Misleading Advertisement Guidelines.
The Coaching Guidelines though offering positive aspects has several more steps to capture before it comprehensively addresses the issue of misleading advertisement under the coaching sector. The inclusion of online coaching centres in the Coaching Guidelines, substitution of the 50-student minimum threshold with other more appropriate standard, addition of refund mechanism etc. are the steps which can be adopted to provide a more robust framework which effectively addresses the challenges faced by consumer in the coaching sector.