Content creation as a job holds high value. Not just because of how much you can earn through it today but because it provides an opportunity to a creator to impart knowledge and/or entertainment to a large audience. Some of these content creators or influencers are even more popular than mainstream celebrities today. They have a sway over their audience that no other type of creator/entertainer has. But of course, as is said, with great power comes great responsibility. Influencers have not just a moral responsibility but also a legal duty to be truthful to their audience. Misinformation and lack of due diligence has been a plague of the influencer industry for a while now.
Finfluencers and health influencers in particular have constantly been under scrutiny for promoting finance apps, financial schemes, giving share market advice, health and wellness products without providing disclaimers and without doing their own due diligence to make sure what they’re promoting will actually be beneficial for their audience. Furthermore, a lot of these influencers are self-proclaimed experts of their fields. But, because they have thousands of followers, consumers of their content often believe what they’re saying at face value.
According to a story published by Mint, Mayank Saw, a commerce student from Dhanbad in Jharkhand turned to a YouTube video posted by influence. Abhishek Kar seeking stock market advice. The video showed screenshots of Kar having earned lakhs of rupees from the stock market through trading in derivatives. Mayank Saw was quite impressed on seeing this video and decided to buy a pass of Kar’s premium Telegram channel by paying Rs. 17049. The payment was done via Rigi. Rigi is an app specifically made for creators to sell their finance courses and Telegram channels. These channels offer daily stock tips to subscribers on buy and sell options. Saw, however, made a small loss based on these tips and eventually decided to rely on his own research.
On the other hand, Abhishek Kar is being called out on social media for showcasing fake screenshots to lure people to join his paid courses and channels. His real income statement was leaked on social media and showed a loss of Rs.1.07 crore made by trading in derivatives from FY21-FY22, as per the Mint story.
It is due to the increase in number of such scams that finfluencers are coming under increasing Government scrutiny. It is becoming more and more important for the Government to impose stricter regulations to ensure consumer safety and financial security. Thus, to make this happen, officials and law makers are looking at various ways to regulate the ecosystem.
“When we talk of ease of doing business, especially what we are discussing today (advertising), there is always a potential of conflict between facilitating something and protecting the rights of consumers. We have to strike a balance. We don’t want you to give up your creativity, we want you to draw a line. We love creativity but will keep annoying you if you cross the line,” said Rohit Kumar Singh, Secretary of the Department of Consumer Affairs.
Finance Minister Nirmala Sitharaman too spread a word of caution against finfluencers. She also informed consumers to not jump into any scheme without doing their own due diligence beforehand. At the end of the day, it is their own hard earned money that they need to protect.
The Advertising Standards Council of India (ASCI) has revised its influencer advertising guidelines to place additional responsibility on advertising content of health and finance influencers. ‘Finfluencers’, operating within the BFSI realm, can now offer investment-related advice only after being registered with the Securities and Exchange Board of India (SEBI). Their registration number must be prominently displayed alongside their name and qualifications. For other financial advice, influencers must possess appropriate credentials such as a license from the Insurance Regulatory and Development Authority of India (IRDAI), be qualified as a chartered accountant, hold a company secretaryship, etc. Moreover, they are expected to adhere to all disclosure prerequisites as stipulated by financial sector regulators from time to time.
Similarly, influencers that endorse products that make claims on health and nutrition must hold relevant qualifications such as medical degrees or certification in nursing, nutrition, dietetics, physiotherapy, psychology, etc., depending on the nature of the advice provided. Such qualifications must be disclosed prominently.
For celebrities, influencers, and virtual influencers who present themselves as health experts or medical practitioners, it is now mandatory to provide clear disclaimers. These disclaimers are intended to ensure that their endorsements are not perceived as a replacement for professional medical advice, diagnosis, or treatment.
Furthermore, The Advertising Standards Council of India (ASCI) has updated the definition of celebrities in its code to include social media influencers having a following of 500,000 or more.
The guidelines mandate that celebrities conduct due diligence to ensure that claims featured in the advertisements can be objectively verified and substantiated. Celebrities, when called upon, need to produce evidence of due diligence. Alternatively, the advertiser should have developed the advertisement following ASCI’s advertising advice.
“Influencers are largely young people, and influencer marketing is their livelihood. We don’t wish to become an impediment to their business but rather nudge them in the right direction. We don’t tell them to stop, but to continue influencing in the right way. The objective is to first educate, tell them what the problem is, ask them to self-regulate, and if that doesn’t work, then and only then, we take action. We want to convey to them that if they play by the rules, we are their friends.” Said Rohit Kumar Singh.