Unacademy, BYJU’S UPSC-Prep Verticals Under Regulatory Lens For Misleading Ads

Edtech giants Unacademy and BYJU’S are under the regulatory scanner for making false claims regarding the number of  their alumni who cleared the Civil Services Exam conducted by the Union Public Service Commission (UPSC).

As per CNBC-TV18, the Central Consumer Protection Authority (CCPA) has reserved its order against the UPSC preparation vertical of Unacademy for allegedly advertising false numbers about their alumni clearing the exam.

While the quantum of action is yet to be decided against Unacademy IAS, a penalty of INR 1 Lakh each has been slapped on Chahal Academy, IQRA IAS, and Rau’s IAS Study Circle. Besides, edtech decacorn BYJU’S is also being probed for similar marketing tactics. 

Making matters worse appears to be the government’s plan to also crack the whip on NEET and JEE prep platforms. Edtech platforms account for a big chunk of JEE and NEET students and may be bracing for a major regulatory action. 

Meanwhile, notices have been issued to 20 UPSC coaching institutes, including BYJU’S, in connection with this case. While some of the 20 centres have reportedly paid the penalty amount, many others are planning to contest the notices. Curiously, the report claims that many hearings on the matter are already underway. 

At the heart of the matter is the excessive marketing claims made by edtech companies and other UPSC-preparation institutes. While 933 students were selected after the final result of UPSC 2022, ads by 10 surveyed institutes claimed that 3,500 of their alumni made the cut. 

Explaining the modus operandi of the row, consumer affairs special secretary and CCPA commissioner Nidhi Khare told CNBC-TV18 that these platforms would kick into action right after UPSC released the results of preliminary exams. 

She said that these coaching institutes would first offer free mock interview sessions for the shortlisted candidates, and then claim as their alumni later. 

“As nearly 1/3rd of shortlisted candidates go on to clear the mains exam, institutes are able to get at least some candidates selected who had only availed of the free mock interview sessions conducted by the institute. She said that misleading advertisements may prompt aspirants to start thinking that unless they join an institute, they won’t be able to crack IAS, JEE or NEET,”  Khare told the news channel. 

A probe by CCPA is said to have revealed instances of five UPSC coaching institutes claiming one single individual as their alumnus. The consumer protection agency reportedly stated that many centres concealed the aspect of free mock interviews and other vital information from customers in page-long ads, violating the Consumer Protection Act.

Meanwhile, CCPA is looking at issuing a detailed set of guidelines to ensure compliance with rules and curb inflated claims by coaching institutes. 

Under current advertisement rules, the first offence constitutes a penalty of INR 10 Lakh while an INR 50 Lakh fine is to be levied for subsequent violations. 

This is not the first time that edtech companies have run into trouble with government agencies. Last year, the apex child rights body in India, the National Commission for Protection of Child Rights (NCPCR), pulled up BYJU’S for allegedly mis-selling courses and luring parents through malpractices. 

Not just this, ASCI also claimed that the education sector accounted for 27% of objectionable ads surveyed by the industry body (traditional education accounted for 22% and edtech 5%) in 2022. 

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.