Daijiworld Media Network - New Delhi

New Delhi, Jul 19: The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants across the country for allegedly violating consumer rights by automatically adding service charges to customers' bills without obtaining their consent.

According to an official statement issued on Sunday, the action follows complaints received through the National Consumer Helpline (NCH). Consumers submitted invoices showing that service charges had been included in their bills by default, prompting the authority to launch an investigation.

The CCPA found that the practice violated the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest regarding Levy of Service Charge in Hotels and Restaurants, which prohibit restaurants from automatically imposing such charges.

In one of the cases, the authority passed a final order against Chaayos (Sunshine Teahouse Pvt. Ltd.), imposing a ?50,000 penalty for levying service charges without customer consent. The company has also been directed to refund the amount collected from the complainant and modify its billing software across all outlets to ensure that service charges or similar fees are not added automatically.

The CCPA has also issued final orders against several other establishments, including Cafe Blue Bottle in Patna, China Gate Restaurant Pvt. Ltd., Fiesta Barbeque Nation (Barbeque Nation Hospitality Private Limited), FOO Ahmedabad Restaurant, L'Opera French Bakery Private Limited, and Zorro – The Luxury Night Club.

The authority said proceedings are continuing against other restaurants where similar complaints have been received and verified.

The consumer protection guidelines, issued on July 4, 2022, clearly state that hotels and restaurants cannot add service charges to bills by default or compel customers to pay them. They also require establishments to clearly inform diners that payment of any service charge is voluntary and entirely at the customer's discretion.

The guidelines further prohibit restaurants from denying entry or refusing service to customers who choose not to pay a service charge.

The CCPA has urged consumers to report instances of restaurants automatically levying service charges through the National Consumer Helpline by calling the toll-free number 1915 or by filing complaints on the NCH platform.