To be taken seriously when hotels and restaurants violate the service charge guidelines: CCPA
The CCPA explicitly instructed district collectors in a letter that collecting a service fee in violation of the rules is an unfair business practise that undermines consumers' rights generally and that complaints of this sort should be given top attention.
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After issuing a recent directive prohibiting hotels and restaurants from automatically adding a service charge to food bills without the customer's consent and allowing customers to report violations, the Central Consumer Protection Authority (CCPA) has now written to Chief Secretaries of all States, union territories, and district collectors across the country to ensure widespread publicity of its guidelines.
The CCPA stated that charging a service fee in violation of the rules is an unfair business practise that harms consumers' rights generally and that complaints of this sort should be given high attention in a letter to district collectors on July 9. The district collector may investigate a rule violation based on this complaint and submit his findings to the CCPA within 15 days.
The Consumer Protection Act of 2019 gave the CCPA jurisdiction to make any necessary regulations to eliminate unfair corporate practises and protect consumers' interests, according to the guidelines.
If a patron discovers that a hotel or restaurant is breaking the law by adding a service charge, the patron may:
- Request that the hotel or restaurant eliminate the service charge from the total bill.
- File a grievance with the National Consumer Helpline (NCH), a different dispute resolution method that operates at the pre-litigation level, by dialling 1915 or using the NCH mobile app.
- File a complaint with the Consumer Commission about unfair business practises. For quick and efficient remedy, the complaint may also be submitted electronically via the e-daakhil site at www.edaakhil.nic.in.
- File a complaint with the District Collector of the relevant district for review and further action from the CCPA. The CCPA can also receive complaints via email at com-ccpa@nic.in.
The CCPA regulations are as follows:
- No hotels or restaurants may automatically or by default include a service charge in the bill.
- Service charges shall not be collected under any other names.
- No hotel or restaurant has the right to charge a customer a service fee.
- Service charges must be made clear to clients that they are optional, voluntary, and at their discretion.
- It is not possible to collect service charges by putting them in meal bills and then adding GST to the final total.
- If a patron notices that a hotel or restaurant is charging a service charge in violation of the regulations, they may request that the offending institution deduct the charge from their bill.
