The Central Consumer Protection Authority (CCPA) has taken action against 41 restaurants nationwide for breaching consumer rights by imposing service charges on bills without explicit consent. The CCPA’s move follows complaints received via the National Consumer Helpline (NCH), supported by invoices showing automatic service charge additions.
Investigations by the CCPA revealed that the automatic imposition of service charges violated guidelines aimed at preventing unfair trade practices in hotels and restaurants. In a specific case, Chaayos (Sunshine Teahouse Pvt. Ltd.) was fined Rs 50,000 for default service charge imposition and ordered to refund the collected amount to the consumer.
Other restaurants facing CCPA’s penalties include Cafe Blue Bottle in Patna, China Gate Restaurant Pvt. Ltd., Fiesta Barbeque Nation, FOO Ahmedabad Restaurant, L’Opera French Bakery Private Limited, and Zorro – The Luxury Night Club. Further actions are ongoing against additional establishments with similar complaints.
The guidelines issued on 4 July 2022 prohibit hotels and restaurants from automatically adding service charges to food bills. Consumers must not be compelled to pay service charges, and establishments must clearly communicate that it is voluntary and at the consumer’s discretion. Additionally, consumers should not face any restrictions for opting not to pay service charges.
CCPA urges consumers to report instances of default service charge imposition by restaurants through the National Consumer Helpline at 1915 (toll-free) or via the NCH platform.
