ASCI warns D2C funding boom masks compliance risks in ads

The Advertising Standards Council of India (ASCI) has warned that many well-funded D2C brands are using exaggerated advertising claims without evidence, a practice it calls the 'compliance fallacy'. Its secretary general writes that digital and social media now account for most advertising complaints, with young D2C brands repeatedly making unsupported claims such as 'clinically proven', 'zero side effects', or 'doctor recommended'.

ASCI says the same instinct that lets founders overstate product claims later shapes how boards are briefed and metrics defined, turning a marketing problem into a governance one. It points to a children's tutoring platform and a celebrated digital-first company that collapsed after aggressive claims and pushy sales tactics, noting ASCI had flagged their advertising as risky years earlier.

The regulator calls on investors to scrutinise advertising claims as rigorously as financial statements, and warns that discovering risks only after a regulator, consumer backlash, or failed transaction is too late. It urges founders to see truthful, supportable claims as an asset, not a burden, and says ASCI now helps advertisers get claims right before campaigns go live.