The Costs Of An Advertising Error

An interesting case was decided by the Karnataka State Commission (KSC) on August 12, 1996 against an advertising company.

A proprietorship travel and tour company booked advertising space in the Yellow Pages of the Bangalore and the Chennai telephone directories for 1994-95 through an advertising company.

Unfortunately, the advertisements for the two cities were interchanged. The insertion in the Chennai telephone directory, thus, mistakenly showed the Bangalore pin and STD codes.

The travel company claimed to have suffered a huge business loss as a result. When these mistakes were highlighted the advertising company refunded the Rs 8,624.25 that the travel company had paid.

The company, however, was not satisfied with a refund. It went ahead and filed a case in the KSC claiming Rs 7,50,000 for the loss sustained by it in business and Rs 5,00,000 towards the loss of work and the mental agony it suffered.

In its version before the KSC, the advertising company averred that this was a proof-reading error. They further averred that when this omission was brought to their notice, they had refunded the clients money. The advertising company sought dismissal of the complaint on these grounds. In addition, the client had signed a contract with them agreeing that the advertising company would not be held responsible for any error or omission in printing.

After hearing both arguments, the KSC said the mistakes were due to the advertising companys negligence.

The KSC, however, held that the claim made by the customer was excessive and had no relation to the loss it had suffered. Moreover, the complainant had placed no material on record except an affidavit to show the huge loss it had suffered.

The KSC thought it proper to award Rs 10,000 as compensation to the travel agency for loss of business and another Rs 5,000 for the mental agony its suffered. The customer was also awarded Rs 2,500 towards the cost of the proceedings.

The KSC directed the advertising company to pay the client the awards 60 days from the date of the order.

It is not just the compensation that is material in this case but the principle that emerges from the KSC order. Any person or firm aggrieved by a mistake in an advertisement given by it either in the media or through an advertising agency can move the consumer forums for relief.

The address of a district forum or a state commission can be obtained from the National Commission, A Wing, 5th floor, Janpath Bhawan, New Delhi 110 001.