Can an Influencer Be Liable for Promoting a Fraudulent Product?
Introduction
Influencer marketing can turn an unknown product into a viral success within hours.
A creator posts a Reel saying:
“I have personally used this product and it completely changed my life.”
Thousands of followers trust the recommendation.
Some purchase the product.
Later, it turns out that:
- the product never existed;
- the seller disappeared with customers’ money;
- the investment platform was fraudulent;
- the health product made false claims;
- the product was counterfeit;
- or the promoter deliberately misrepresented what consumers were buying.
The obvious question is:
Can the influencer who promoted the product also be held legally responsible?
The answer is:
Potentially, yes.
Under Indian law, influencers are not automatically immune simply because they were “only promoting” someone else’s product.
At the same time, liability is not automatic merely because the promoted business later fails or turns out to be fraudulent.
The law looks at questions such as:
- What exactly did the influencer say?
- Was the promotion disclosed as advertising?
- Did the influencer make factual claims?
- Were those claims capable of verification?
- Did the influencer exercise due diligence?
- Did they actually use or experience the product?
- Did they know the business was fraudulent?
- Did they receive commission or other benefit?
- Did consumers rely upon the endorsement?
- Was the influencer merely careless, or were they actively involved in the scheme?
The legal consequences can range from consumer-regulatory penalties to civil liability and, in serious cases involving knowing participation, possible criminal exposure.
Influencers Are “Endorsers” Under Consumer Law
The starting point is the Consumer Protection Act, 2019 and the Central Consumer Protection Authority’s Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022.
The CCPA framework treats an endorser broadly as an individual, group or institution whose opinion, belief, finding or experience is represented in an advertisement.
That definition can clearly include social-media influencers.
Therefore, a creator appearing in an Instagram Reel, YouTube video or other promotional content may be subject to the same broad consumer-protection principles that apply to celebrity endorsements.
The Basic Rule: Influencers Must Exercise Due Diligence
The 2022 CCPA Guidelines require endorsements to reflect the genuine, reasonably current opinion of the endorser and to be based on:
- adequate information about the product or service; or
- actual experience with it.
The endorsement must not be deceptive.
This creates an important responsibility.
An influencer should not simply accept every advertising script and assume:
“If the brand gave me these claims, the brand is legally responsible.”
The influencer has an independent duty to exercise reasonable due diligence.
Example: Product Never Used
Suppose a skincare company pays a creator to say:
“I have been using this serum for three months and it completely removed my acne.”
But the influencer received the serum only two days earlier.
That statement is not simply exaggerated advertising.
The influencer is making a false representation about personal experience.
The fact that the brand wrote the script does not necessarily protect the influencer.
Section 21 of the Consumer Protection Act
Section 21 of the Consumer Protection Act gives the Central Consumer Protection Authority significant powers regarding false or misleading advertisements.
Where a manufacturer or endorser is involved in a false or misleading advertisement, the CCPA may impose a penalty of up to:
₹10 lakh for a first contravention
and up to:
₹50 lakh for every subsequent contravention.
The CCPA may also prohibit the endorser from making endorsements for:
- up to one year for a first contravention; and
- up to three years for subsequent contraventions.
These powers apply to endorsers—not merely to manufacturers.
Does This Mean Every Influencer Can Be Fined ₹10 Lakh?
No.
The statutory amount is a maximum.
It is not an automatic penalty every time a creator makes a mistake.
The authority considers the circumstances of the contravention.
But the existence of such substantial penalties demonstrates that influencer advertising is no longer treated as casual or legally insignificant.
Due Diligence Is a Major Defence
Section 21 also provides an important protection for endorsers.
An endorser is not liable to the relevant penalty if they exercised due diligence to verify the truth of the claims concerning the product or service being endorsed.
This creates a simple but powerful compliance principle:
Before making a factual claim, ask the advertiser to prove it.
What Does Due Diligence Mean in Practice?
Due diligence will depend on the product and claim.
For an ordinary fashion product, reasonable verification may be relatively simple.
For a medical product or financial investment, substantially more diligence may be expected.
An influencer should consider asking:
- Is the company genuine?
- Is there a legitimate website?
- Is the seller legally registered where required?
- Is the claim supported by documents?
- Does the product have necessary regulatory approval?
- Have I actually used the product?
- Are the performance claims independently verifiable?
- Are returns or guarantees being described accurately?
- Is the company making unrealistic promises?
The stronger and more consequential the claim, the greater the need for verification.
Example: “Guaranteed Returns”
Suppose an influencer promotes an investment platform and says:
“Deposit ₹50,000 and you are guaranteed to earn ₹5 lakh within six months.”
That should immediately trigger serious due-diligence concerns.
Claims of guaranteed extraordinary investment returns may implicate securities regulation, consumer law and potentially criminal law if the underlying scheme is fraudulent.
Simply writing:
“#Ad”
does not make the claim lawful.
Disclosure and Truthfulness Are Separate Obligations
Influencers sometimes believe:
“I disclosed #Ad, so I am protected.”
That is incorrect.
Disclosure tells the audience that the content is sponsored.
It does not make false statements lawful.
A compliant advertisement must address both:
Transparency
Was the commercial relationship clearly disclosed?
and
Truthfulness
Were the claims accurate, substantiated and non-misleading?
An influencer can comply with the disclosure rules and still face legal problems for a misleading endorsement.
Can an Influencer Be Liable if the Product Itself Is Fraudulent?
Possibly.
The answer depends heavily on the influencer’s conduct.
Consider three different situations.
Situation 1: Innocent endorsement
The influencer:
- verifies the company;
- receives and uses the product;
- makes only genuine statements;
- clearly discloses sponsorship;
- asks for evidence supporting factual claims;
- and has no reason to suspect fraud.
The business later collapses because its promoters secretly committed fraud.
The influencer has a much stronger defence.
Situation 2: Negligent endorsement
The influencer:
- accepts a large fee;
- does no verification;
- never uses the product;
- repeats extraordinary claims;
- ignores obvious warning signs;
- and tells followers that the company is “100% safe.”
This creates much greater regulatory risk.
Situation 3: Knowing participation
The influencer knows the scheme is fraudulent but continues promoting it because they receive commission from every victim.
That may go far beyond misleading advertising and potentially create criminal exposure.
When Can Criminal Liability Arise?
Consumer-law liability and criminal liability are different.
A misleading endorsement does not automatically make an influencer a criminal.
Criminal liability generally requires proof of the ingredients of a criminal offence, including the required mental element.
Under the Bharatiya Nyaya Sanhita, 2023, abetment includes:
- instigating another person;
- engaging in a conspiracy in specified circumstances; or
- intentionally aiding the commission of an act.
Therefore, if an influencer knowingly helps a fraudulent scheme obtain victims, issues involving:
- abetment;
- conspiracy;
- cheating;
- dishonest inducement;
- or other offences
may arise depending on the facts.
Example: Knowing Participation in a Scam
Imagine an influencer knows that an “investment platform” does not conduct any real investment activity.
The promoter tells the influencer:
“Just keep bringing people in. We will pay you 15% of every deposit.”
The influencer then tells followers:
“I personally verified this platform. Your money is completely safe.”
Thousands of people invest and lose money.
If investigators prove that the influencer knew the scheme was fraudulent and intentionally induced followers to deposit money, the issue may no longer be limited to advertising regulation.
Criminal-law questions may arise.
BNS and Intentional Assistance
Section 45 of the Bharatiya Nyaya Sanhita defines abetment to include intentionally aiding the doing of an act and, in specified circumstances, conspiracy or instigation.
The important word is:
intentionally.
Merely appearing in an advertisement that later becomes controversial is not the same as intentionally assisting fraud.
Investigators would need to examine evidence such as:
- contracts;
- payment records;
- messages;
- internal communications;
- warnings received;
- knowledge of complaints;
- commission structure;
- continued promotion after fraud became known;
- and representations made to consumers.
Can an Influencer Be Liable for Consumers’ Financial Loss?
Potentially, depending on the legal proceeding and facts.
Consumers may seek remedies under the Consumer Protection Act where they suffer loss from unfair trade practices, misleading advertisements or deficient services.
A misleading endorsement can also form part of the evidentiary basis demonstrating how consumers were induced to purchase.
However, whether the influencer personally must compensate every consumer is not automatic.
A court or Consumer Commission would need to examine:
- the influencer’s role;
- the nature of the representation;
- causation;
- consumer reliance;
- contractual relationships;
- and applicable statutory remedies.
Therefore, it would be inaccurate to say that every influencer automatically owes the full purchase price to every dissatisfied customer.
What If the Product Is Merely Defective?
A defective product and a fraudulent product are not necessarily the same thing.
Suppose an influencer promotes a smartphone.
Some units later develop battery problems.
That does not automatically mean the influencer made a fraudulent endorsement.
Questions would include:
- Did the influencer know about the defect?
- Did they falsely claim that the product could never fail?
- Did they have genuine experience with the product?
- Were claims provided by the manufacturer reasonably verified?
Product defects are primarily different from deliberate fraudulent schemes.
What If the Brand Lied to the Influencer?
This is an important defence scenario.
Suppose the brand gives the creator:
- fabricated laboratory reports;
- fake registrations;
- fake certifications;
- and false sales information.
The influencer reviews the documents reasonably and has no obvious reason to doubt them.
The later discovery that the company deceived both consumers and the influencer may substantially strengthen the influencer’s due-diligence defence.
Section 21 expressly protects endorsers who exercised appropriate due diligence.
Influencers Should Preserve Due-Diligence Records
Creators should not rely on memory.
Before publishing important endorsements, preserve:
- campaign agreement;
- brand communications;
- product invoices;
- product samples;
- licences;
- registrations;
- claim substantiation;
- test reports;
- email confirmations;
- compliance statements;
- and screenshots of the advertisement as published.
If regulators later ask:
“What steps did you take to verify this claim?”
documentation may be crucial.
Warning Signs an Influencer Should Not Ignore
Due diligence becomes especially important where there are obvious red flags.
Examples include:
- “100% guaranteed return”;
- “government approved” without proof;
- “risk-free investment”;
- “cures cancer”;
- “lose 15 kg in 10 days”;
- “earn ₹1 lakh every week with no work”;
- no physical business address;
- recently created website;
- fake-looking certificates;
- payment requested only through personal accounts;
- repeated complaints online;
- no refund mechanism;
- unclear ownership;
- pressure to delete negative comments;
- unusually high influencer commissions.
An influencer who deliberately ignores obvious red flags may have difficulty later arguing that they exercised proper diligence.
What If Complaints Begin After the Campaign Starts?
The influencer should reassess the promotion.
Suppose dozens of followers say:
“We paid but nothing was delivered.”
Continuing to post:
“This brand is completely trustworthy”
without investigation can significantly worsen the creator’s position.
The influencer should consider:
- pausing promotion;
- contacting the brand;
- seeking clarification;
- preserving communications;
- correcting earlier statements where necessary;
- and obtaining legal advice for serious cases.
Deleting the Promotion Does Not Erase the Evidence
Removing a Reel does not necessarily eliminate liability.
Consumers may have:
- screenshots;
- screen recordings;
- archived pages;
- invoices;
- affiliate records;
- campaign contracts;
- and payment evidence.
Platforms and brands may also retain campaign data.
Therefore, creators should not assume:
“If I delete the video, nobody can prove it existed.”
Affiliate Commission Can Increase Risk
Affiliate arrangements are particularly important.
Suppose an influencer earns ₹3,000 each time a follower buys a ₹10,000 “investment course.”
The influencer’s compensation directly increases with consumer purchases.
That financial interest should be disclosed.
If the product later proves fraudulent, investigators may also examine the affiliate records to determine:
- how many buyers were referred;
- how much money the influencer earned;
- and whether they knew about the fraud.
Referral Codes Create Evidence
Discount and referral codes can provide a clear record of the influencer’s role.
For example:
Use code KEYUR20
may allow a company to track:
- number of customers;
- transaction value;
- commissions;
- conversion rate.
Such records can become relevant in regulatory or criminal proceedings.
Can a Celebrity Say “I Only Read the Script”?
That is not always a sufficient defence.
The CCPA framework expects endorsers to exercise due diligence and requires endorsements to reflect genuine, reasonably current opinion based on adequate information or experience.
The more extraordinary the claim, the less convincing it may be to say:
“I never checked anything because the advertiser gave me the words.”
Financial Products Carry Much Higher Risk
Finfluencer promotions require special caution.
SEBI’s current framework restricts persons regulated by SEBI and their agents from associating, directly or indirectly, with persons who:
- give securities advice or recommendations without required registration or permission; or
- make prohibited claims concerning returns or performance.
The rules have been in force since August 2024, with subsequent SEBI clarifications.
Therefore, promoting a fraudulent investment product may involve:
- Consumer Protection Act issues;
- SEBI law;
- fraudulent and unfair trade practice rules;
- and potentially criminal law.
Example: Finfluencer Promoting Fake Trading App
An influencer receives ₹10 lakh to promote an unregistered trading app.
They tell viewers:
“This platform is regulated by SEBI and guarantees 30% monthly returns.”
Neither statement is true.
The creator never verifies the registration.
Thousands deposit money.
This creates a significantly greater risk than an ordinary non-financial product endorsement.
The claims concern:
- regulatory status;
- investment safety;
- and financial returns.
All are objectively verifiable.
SEBI’s Fraud and Unfair Trade Practice Framework
SEBI also maintains regulations dealing with fraudulent and unfair trade practices in the securities market, updated through December 2025.
Where influencer activity crosses into manipulation, fraudulent securities promotion or prohibited recommendations, securities-law liability may therefore arise independently of ordinary consumer-advertising rules.
“Not Financial Advice” Is Not a Magic Disclaimer
Creators sometimes make detailed securities recommendations and then write:
“Not financial advice.”
The legal analysis looks at the substance of what the influencer actually does.
A disclaimer cannot necessarily transform regulated investment advice into harmless entertainment.
Similarly:
“Do your own research”
does not cure knowingly false claims.
Health Products Also Carry Greater Risk
Health and wellness promotions may affect consumers’ physical well-being.
Claims such as:
- “cures diabetes”;
- “reverses PCOS permanently”;
- “guaranteed weight loss”;
- “replaces prescribed medicine”;
- or “100% medically proven”
require particularly careful substantiation.
Influencers should verify:
- regulatory status;
- scientific evidence;
- ingredients;
- approvals;
- and permitted claims.
A creator without medical qualifications should also avoid presenting themselves as a qualified doctor or healthcare professional.
Fraudulent Health Product Example
Suppose a company sells an unapproved tablet.
It pays influencers to say:
“Doctors don’t want you to know this, but this pill cures cancer naturally.”
If an influencer knowingly or recklessly repeats that claim without any reliable evidence, consumer-law exposure can be substantial.
If the scheme involves deliberate deception and resulting harm, additional legal consequences may arise.
Counterfeit Products
Influencers should also be careful when promoting:
- fake luxury products;
- counterfeit cosmetics;
- fake electronics;
- unauthorised replicas;
- or products using another company’s trademark without permission.
The fact that a product is cheaper does not excuse misleading consumers into believing it is genuine.
Potential legal issues may include:
- consumer protection;
- trademark infringement;
- passing off;
- copyright;
- and fraud.
Betting and Gambling Promotions
This area carries especially serious regulatory risk.
In March 2024, the CCPA issued an advisory warning celebrities and influencers against promoting or endorsing illegal betting and gambling activities.
The advisory stated that endorsement of activities prohibited under law can expose endorsers to liability and specifically warned influencers not to promote unlawful betting platforms.
Therefore:
Disclosure does not legalise promotion of an unlawful activity.
Writing:
“#Ad”
before promoting an illegal betting platform does not solve the underlying legal issue.
What About Real-Money Gaming?
Not every real-money gaming product has the same legal status.
The regulatory position may depend on:
- nature of the game;
- State law;
- central regulation;
- tax law;
- and whether betting or gambling is involved.
Influencers should therefore avoid assuming that all gaming platforms can be freely promoted merely because they operate online.
Fraudulent Online Courses
Online courses and “make money” programmes are another growing risk area.
An influencer may promote:
“My friend made ₹10 lakh in one month using this secret course.”
If that testimonial is fabricated, it can be misleading.
If the course provider uses fake income screenshots and fabricated testimonials, creators should investigate before repeating those claims.
Dropshipping and E-Commerce Products
Influencers often promote unknown direct-to-consumer brands.
Due diligence should include basic checks such as:
- seller identity;
- contact details;
- return policy;
- product availability;
- consumer reviews;
- and whether extraordinary claims are substantiated.
Not every creator needs to conduct a forensic audit of every ₹500 product.
But reasonable diligence should match the seriousness of the claim and risk to consumers.
What If the Influencer Has Millions of Followers?
A large audience can increase potential impact.
Section 21 requires the CCPA, while determining penalties, to consider factors including:
- population affected;
- frequency and duration;
- vulnerability of the affected class;
- and gross revenue generated from the conduct.
Therefore, a large-scale national campaign can present greater regulatory significance than an isolated small post.
Micro-Influencers Are Not Automatically Exempt
The law does not provide a general exemption simply because a creator has:
- 5,000 followers;
- 10,000 followers;
- or 25,000 followers.
A niche creator may still materially influence purchasing decisions.
The focus is on the endorsement and its impact, not merely follower count.
Can Consumers Complain Against an Influencer?
Yes.
Depending on the conduct, consumers may raise complaints through:
- the National Consumer Helpline;
- consumer commissions;
- the CCPA;
- ASCI;
- sector-specific regulators;
- cybercrime authorities;
- or police.
The correct route depends on whether the issue is:
- misleading advertising;
- defective goods;
- fraudulent financial activity;
- cybercrime;
- illegal betting;
- securities advice;
- or another regulatory violation.
Can ASCI Take Action?
ASCI’s influencer advertising guidelines operate as an industry self-regulatory framework.
Complaints can be made about advertisements that violate its code or influencer disclosure requirements.
ASCI action is distinct from statutory enforcement by the CCPA or another government regulator.
A campaign may therefore face both:
- self-regulatory scrutiny; and
- statutory consequences.
Can the Influencer Be Ordered to Remove or Correct the Advertisement?
Yes, regulatory mechanisms can require misleading advertisements to be modified or discontinued.
Section 21 permits the CCPA to order discontinuation or modification of false or misleading advertising.
In the influencer context, this can translate into:
- removing the post;
- changing misleading claims;
- adding clarification;
- or correcting promotional material.
Can an Influencer Escape Liability by Saying “My Opinion Only”?
Not necessarily.
There is a difference between:
“I personally like the taste.”
and
“This product is clinically proven to cure diabetes.”
The first may genuinely be subjective opinion.
The second is an objectively verifiable factual claim.
Calling a factual representation an “opinion” does not automatically protect it.
Puffery vs Factual Claims
Advertising law generally tolerates obvious exaggeration that reasonable consumers would not treat literally.
For example:
“The coolest shoes in the universe.”
is likely promotional puffery.
But:
“These shoes reduce knee injury by 80%, medically proven.”
is a factual claim capable of verification.
The latter requires evidence.
Can Influencers Rely on Brand Certifications?
They can consider them as part of due diligence.
But creators should ask whether the documentation appears credible.
For example:
- Is the certificate issued by the claimed authority?
- Can it be independently verified?
- Is it current?
- Does it actually support the advertised claim?
A random PDF saying “Government Approved” should not automatically be accepted as proof.
What if the Brand Is a Large Well-Known Company?
Brand reputation can be relevant to what constitutes reasonable diligence, but it does not eliminate the endorser’s obligations.
Even established companies may make claims that require verification.
The appropriate level of diligence depends on the circumstances.
Should Influencers Get Written Warranty From Brands?
For major campaigns, this is sensible.
Influencer contracts can require the advertiser to warrant that:
- the product is lawful;
- advertising claims are accurate;
- required regulatory permissions exist;
- supplied material is genuine;
- and the campaign complies with applicable law.
The agreement may also include indemnity provisions.
However, contractual indemnity does not automatically prevent regulators from proceeding against the influencer.
It may only help allocate financial responsibility between the brand and influencer afterwards.
Influencer Contract Checklist
A creator agreement should ideally state:
- exact product/service;
- sponsor identity;
- compensation;
- affiliate payments;
- disclosure requirements;
- factual claims authorised;
- supporting documentation;
- regulatory status;
- intellectual-property rights;
- prohibited claims;
- correction obligations;
- removal obligations;
- warranties;
- indemnity;
- and termination rights where the brand faces fraud allegations.
What Should an Influencer Do Before Accepting a Campaign?
A practical checklist:
- Search the company’s legal identity.
- Verify the official website.
- Ask for GST/company details where relevant.
- Verify licences for regulated products.
- Examine consumer complaints.
- Actually use or inspect the product where appropriate.
- Ask for evidence supporting important claims.
- Avoid guaranteed financial or medical promises.
- Make sponsorship disclosure clearly.
- Keep records of all verification.
- Review sector-specific law.
- Refuse campaigns that appear obviously fraudulent.
What Should an Influencer Do After Discovering Fraud?
If a creator later discovers credible evidence that the promoted business is fraudulent, continuing to promote it can substantially increase risk.
The creator should consider:
- immediately pausing further promotion;
- preserving all contracts and messages;
- obtaining legal advice;
- informing the advertiser that the campaign is suspended;
- correcting or removing misleading claims where appropriate;
- warning followers carefully if legally appropriate;
- cooperating with regulators or police;
- and preserving payment/affiliate records.
Do not destroy evidence.
Should the Influencer Refund Their Sponsorship Fee?
There is no universal rule requiring this.
Contractual and criminal issues depend on the circumstances.
However, sponsorship payments may become evidentially relevant where regulators investigate whether the influencer:
- knowingly profited from the fraud;
- continued after becoming aware;
- or received unusually high commissions tied directly to victim losses.
Can Authorities Freeze the Influencer’s Bank Account?
Potentially, in serious criminal investigations where authorities claim funds represent proceeds connected with an offence.
The legality and extent of any freeze would depend on applicable criminal procedure and the evidence linking the funds to the alleged fraud.
Mere receipt of an ordinary advertising fee does not automatically prove it is criminal proceeds.
Civil Liability vs Criminal Liability
This distinction should remain clear.
Consumer/regulatory liability
Can arise from:
- misleading claims;
- lack of due diligence;
- unlawful endorsement;
- or consumer-law violations.
Civil liability
May involve claims for:
- compensation;
- damages;
- or other remedies,
depending on causation and legal duty.
Criminal liability
Generally requires additional proof of:
- knowledge;
- dishonest intention;
- conspiracy;
- intentional assistance;
- or other statutory elements.
These should not be collapsed into one concept.
Example: Innocent Influencer
A reputable electronics company provides a phone.
The creator:
- tests it for a month;
- makes genuine observations;
- labels the video Sponsored;
- avoids unverified claims;
- and checks technical specifications.
Six months later, the company’s founders commit unrelated financial fraud.
The mere fact that the creator previously advertised the phone does not automatically make them liable for the founders’ crime.
Example: Reckless Influencer
A cryptocurrency platform offers a creator ₹20 lakh.
The creator:
- does no registration check;
- never uses the service;
- claims the company is “SEBI approved”;
- promises guaranteed returns;
- and deletes comments from victims warning of fraud.
The platform disappears with customers’ money.
The creator’s potential legal exposure is substantially greater.
Example: Knowing Participant
An influencer privately knows a business is a Ponzi scheme.
They receive 20% of every new investor’s deposit.
They deliberately manufacture fake profit screenshots and claim:
“I withdrew ₹10 lakh yesterday.”
The screenshots are fabricated.
This may potentially involve active participation in fraud rather than ordinary advertising misconduct.
Frequently Asked Questions
Can an influencer be legally liable for promoting a scam?
Yes, depending on what the influencer knew, what they claimed, whether they exercised due diligence and whether they participated in the fraud.
Is an influencer automatically liable if the company later commits fraud?
No.
Later wrongdoing by the company does not automatically make every earlier endorser responsible.
Can the CCPA fine an influencer?
Yes.
For false or misleading endorsements, Section 21 allows penalties of up to ₹10 lakh for a first contravention and up to ₹50 lakh for subsequent contraventions.
Can the influencer be banned from endorsements?
Yes.
The CCPA can prohibit endorsements for up to one year for a first contravention and up to three years for subsequent contraventions.
What is the influencer’s best defence?
Demonstrating genuine due diligence in verifying the claims can be a significant statutory defence.
Is #Ad enough to avoid liability?
No.
Disclosure does not protect false or misleading claims.
Can an influencer go to jail for promoting a fraudulent product?
Potentially only where the facts establish an applicable criminal offence, such as knowing participation, intentional aid, conspiracy or cheating.
A misleading advertisement alone does not automatically result in imprisonment.
What if the influencer did not know it was a scam?
Lack of knowledge can be highly relevant, especially where the influencer conducted reasonable verification.
But absence of actual knowledge does not necessarily cure a misleading endorsement where reasonable due diligence was not exercised.
Can consumers sue the influencer?
Potentially, depending on the facts, representations, causation and remedies sought.
Can a finfluencer promote guaranteed returns?
Such claims are highly risky and may implicate SEBI rules in addition to consumer-protection law. SEBI restricts associations involving unregistered securities advice and impermissible return/performance claims.
Can an influencer promote an illegal betting app if they disclose #Ad?
No.
The CCPA has specifically warned influencers against endorsing illegal betting and gambling activities.
The Most Important Legal Question: What Did the Influencer Know and Do?
When a fraudulent product is promoted, public anger often focuses immediately on the influencer.
But legal liability requires a more careful analysis.
The critical questions are:
Did the influencer knowingly participate?
Were the claims false or misleading?
Were obvious warning signs ignored?
Was reasonable verification carried out?
Was the commercial connection disclosed?
Did the influencer continue promoting after complaints emerged?
Was the influencer merely paid a fixed advertising fee, or did they directly share in the fraudulent proceeds?
These facts can completely change the legal outcome.
The Larger Principle: Influence Creates Responsibility
Influencers are valuable to advertisers precisely because consumers trust them.
That commercial value comes with responsibility.
A creator cannot simultaneously argue:
“My followers buy products because they trust my recommendation”
and
“I have absolutely no responsibility for checking anything I tell them.”
Indian consumer law increasingly rejects that approach.
But the law also does not expect influencers to become forensic investigators before accepting every legitimate collaboration.
The standard is one of reasonable due diligence appropriate to the claim and the risk involved.
A ₹700 shirt and a ₹7 lakh investment product do not require identical levels of verification.
Conclusion
Can an influencer be liable for promoting a fraudulent product?
Yes—but liability depends on the influencer’s own conduct, not merely on the fact that the product or company later turned out to be fraudulent.
Indian consumer law treats influencers as endorsers and requires them to exercise due diligence.
The endorsement must reflect a genuine, reasonably current opinion and should be based on adequate information or actual experience with the product or service.
Where an influencer endorses a false or misleading advertisement without adequate diligence, the Central Consumer Protection Authority may take action.
Under Section 21 of the Consumer Protection Act, penalties can extend to:
- ₹10 lakh for a first contravention;
- ₹50 lakh for subsequent contraventions;
- and a temporary prohibition on making endorsements.
At the same time, the law expressly protects endorsers who can show that they exercised due diligence to verify the claims they promoted.
That makes documentation extremely important.
Before endorsing a product, influencers should verify material claims, preserve supporting documents, understand what they are promoting and clearly disclose commercial relationships.
The risks become much greater in sectors such as:
- investments;
- securities;
- health products;
- betting and gambling;
- counterfeit goods;
- and schemes promising extraordinary earnings.
SEBI has imposed additional restrictions around securities-related promotions and associations with unregistered persons giving prohibited advice or return claims.
The CCPA has separately warned influencers against promoting unlawful betting and gambling activities.
Where an influencer actually knows that a scheme is fraudulent and intentionally helps bring victims into it, the issue can move beyond misleading advertising.
Depending on the evidence, provisions relating to abetment, conspiracy, cheating or other offences may become relevant. The Bharatiya Nyaya Sanhita expressly treats intentional assistance, instigation and specified conspiratorial participation as forms of abetment.
The practical rule for influencers is therefore simple:
Do not endorse what you cannot reasonably verify.
And the more serious the promise—especially promises concerning health, safety, investments or guaranteed financial returns—the greater the level of verification that should occur before publishing.
Influence can generate income.
But when commercial influence is used to persuade consumers to part with their money, it can also generate legal responsibility.
This article reflects the legal and regulatory position publicly available up to September 2026. Influencer liability is highly fact-specific, and additional sector-specific laws may apply to financial services, health products, betting/gaming, food, medicines and other regulated products. This article is intended for general legal information and academic discussion and does not constitute legal advice.
