Financial Times

Code against misleading ads
The Central Bank, the Consumer Affairs Authority (CAA) and the advertising industry are joining together to tackle the issue of misleading and unethical advertising by companies offering high interest rates for deposits from the public and in recent times, over the-counter cures for health problems.

The move also comes in the wake of a string of recent failures by so-called finance companies or their directors vanishing with the funds leaving many investors often government pensioners in the lurch.

Kenneth Honter, President of the Accredited Advertising Agencies Association (4As), at a recent meeting with Central Bank Deputy Governor W.A. Wijewardene suggested that advertisements from financial institutions should carry a logo or message indicating that it has been registered by the Central Bank. "If an unregistered finance company wants to advertise then the media could either not accept the advertisement or make sure the public has enough information about the (status of the) company."

The crackdown on dubious advertisements by unregistered finance companies is now part of larger efforts by the three agencies to stamp out misleading or unethical advertising on a range of products. It also applies to the use of women and children in advertisements. Kithsiri Gunawardene, director general of the CAA, said the authorities last week wrote to a particular healthcare company raising concerns about its advertisement. In that advertisement, the company was promoting a herbal product that claims to help alleviate chest pains and eliminate the need to undergone surgery for heart ailments.

"I wrote to the company asking them to justify this claim. A letter was also sent to the Sri Lanka Medical Council seeking a medical opinion on the claim," he said. The same company had recently said it has medication to tackle the HIV virus. Another advertisement that drew the CAA's attention was promoting a particular sausage in which the company implies that "everyone" had grown up on their brand of sausages. "We wrote to the company after receiving a complaint from the consumer saying the advertisement was misleading and deceptive."

While the Central Bank recently wrote to media institutions alerting them to the practice of unauthorised institutions canvassing money from the public through the print and electronic media, and urging caution in accepting these advertisements, it has also proposed a code of best practices for media communications in the financial sector.

"We have submitted this to the experts in the advertising industry and they were of the view that a code of conduct should be adopted as a guideline to develop self discipline within the industry rather than trying to implement it as a law," said Central Bank Information Director C.K. Nanayakkara. The proposed code has been approved by the Financial Sector Reforms Committee for voluntary adoption by media institutions and sent to the 4As. (See page 13 for draft proposal)

The 4As, the official body of advertising agencies in Sri Lanka, said it was concerned and alarmed at the many instances of unethical advertising appearing in the media. It said it was aware of the many instances where women are used in "most unseemly situations" to sell products which have absolutely no relevance to them and children being enticed with false promises.

It has already agreed to a Code of Creative Ethics which will govern their creative conduct. "Most advertising agencies already do adhere to a creative code of ethics and are conscious of their social responsibilities," noted Honter from the 4As."The objective of publishing our Creative Code of Ethics is to confirm our commitment to ensure that the consumer is informed of our clients products and services in an honest and credible manner.

We are aware of the recent upsurge of protests regarding unethical and dishonest advertising by certain unethical organisations and the 4As will, as the apex body of advertising in this country, do all we can to create an atmosphere conducive to truthful advertising," he added.

Panel on unethical ads
The Sunday Times FT in collaboration with the 4As will host a once-a-month column where readers can write in, send questions or raise concerns about dubious, misleading or unethical advertisements. The 4As will appoint a panel of experienced advertising professionals who would take up readers' questions and concerns with the parties responsible for questionable marketing communications for clarification on claims etc.

The concerns of the public will be conveyed to the party concerned and their views sought. The 4As says it would do everything in its power to help curb advertising that is false, of bad taste and harmful to public sensibilities. The first column will appear on Sunday, February 15. Send your questions, concerns or comments to: The Business Editor, The Sunday Times, 8, Hunupitiya Cross Road, Colombo 2 or email: ft@sundaytimes.wnl.lk

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