Homebuyers' body calls for stricter govt action against misleading real estate ads

The Forum for People's Collective Efforts (FPCE), a pan-India homebuyers' organisation, has urged the Ministry of Consumer Affairs to take decisive action against the rampant issue of misleading advertisements in the real estate sector. 

The FPCE has highlighted that a staggering 34% of real estate advertisements from April to September 2024 in Maharashtra alone were found to be in direct violation of the law, according to a report by the Advertising Standards Council of India (ASCI). 

This revelation has prompted the FPCE to demand the implementation of more stringent guidelines and severe penalties for developers engaging in deceptive marketing practices.

The organisation, which is also a member of the Ministry of Housing & Urban Affairs' RERA Central Advisory Council, has expressed deep concern over the lack of effective consumer restitution mechanisms. Misled homebuyers often find themselves without adequate recourse to withdraw their investments or claim compensation for the misrepresentations they encounter in property advertisements.

In their letter to the Ministry, FPCE proposed several measures to curb this growing issue:

Stricter guidelines: Development of comprehensive, sector-specific advertising rules that ensure transparency and accuracy in all promotional materials.

Enhanced penalties: An increase in the fines imposed on developers for misleading advertisements, aiming to deter such practices by making the financial repercussions significant.

Consumer-centric monitoring: Expansion of advertisement screening parameters to include a broader range of deceptive practices, focusing on consumer interests, and ensuring mandatory disclosures like registration numbers and QR codes for property verification.

Independent oversight: Establishment of an independent monitoring body or enhancement of the role of existing organisations like ASCI to ensure unbiased scrutiny of real estate advertisements.

The FPCE pointed out that the average penalty currently stands at an inconsequential amount of Rs 14,000 to Rs 15,000, which they argue does little to stop developers from employing misleading tactics. The homebuyers' body has stressed that without stricter enforcement, these practices will continue to exploit unsuspecting consumers.