The Central Consumer Protection Authority (CCPA) has imposed a penalty of ₹8 Lakh on edtech startup Raising Superstars for misleading advertisements and claims.
Raising Superstars, which offers activity-based educational videos to engage 0-6-years old children, posted an advertisement with claims like “crawling at 3 months”, “walking at 8 months”, and “using 200+ vocabulary by 18 months”.
The Mumbai-based startup claimed to offer these solutions under its “Prodigy Framework Program”.
After receiving a complaint from the Advertising Standards Council of India (ASCI), the CCPA issued a show cause notice to the edtech company in 2022. Over the years, Raising Superstars was asked to submit evidence to prove its claims along with customer testimonials.
“During the extensive hearings in the case, it has become clear that the opposite party (Raising Superstars) has no objective data to back its claim. It has been revealed that the opposite party has not obtained any feedback from the parents who had enrolled in the programme. In a nut shell, the opposite party did not have any in house dataset to back its claims,” the CCPA said in its order.
Notably, while the advertisement was live on the startup’s website, it managed to acquire 13,000 new users until the ASCI complaint was filed. During the tenure of the case, Raising Superstars also added disclaimers to the content available on its website and made additions to its terms and conditions – mentioning that results are not guaranteed, outcomes vary from child to child, and the programmes are child-led and pressure-free.
Founded in 2020 by Raghav Himatsingka and Shraddha Himatsingka, Raising Superstars bagged $2 Mn in its pre-Series A round from BLinC Invest in 2023.
The development comes at a time when the CCPA has been actively monitoring brands, keeping a check on advertisement claims. It has imposed penalties on several companies in the recent past.
For instance, listed omnichannel kidswear retailer FirstCry was slapped with a penalty of ₹2 Lakh from the CCPA in the case of “drip pricing”. FirstCry was fined after a consumer highlighted that the company displayed products with the representation “MRP inclusive of all taxes”, while at the checkout stage, an additional GST was levied on the discounted price.
Similarly, the CCPA also penalised ride-hailing giant Rapido last year. The consumer watchdog slapped a penalty of ₹10 Lakh on the startup for two of its ad campaigns – ‘Auto in 5 min or get ₹50’ and ‘guaranteed auto’.
The Authority is also probing ecommerce platforms for charging additional fees on cash-on-delivery (CoD) orders.
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