In the digital era, social media has emerged as a critical medium for consumer-brand interactions, shaping perceptions and influencing purchase decisions. This paper investigates the role of social media-based virtual word-of-mouth (vWOM) in shaping consumer trust and loyalty, while also considering the implications of consumer protection laws in ensuring ethical digital engagement. Using a mixed-method approach combining survey analysis and in-depth interviews, the study explores how user-generated content (UGC), influencer marketing, and peer reviews impact consumer psychology and behaviour. Findings indicate a strong correlation between vWOM exposure and enhanced brand trust, which further mediates long-term consumer loyalty.

Additionally, this paper incorporates the Indian legislative framework, namely the Consumer Protection Act, 2019, and related policies on influencer advertising, to highlight the legal framework that promotes transparent and reliable digital marketing techniques. This legal aspect not only strengthens the need of authenticity and transparency in vWOM but also underscores the necessity of regulatory compliance in fostering customer trust. This study enhances digital marketing literature and legal studies by providing a cohesive framework for using vWOM in a manner that is legally permissible, trust-oriented, and focused on consumer-brand loyalty...