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    Hotel, restaurant service charge rule violators will be booked, warns consumer protection body

    business | IST

    Hotel, restaurant service charge rule violators will be booked, warns consumer protection body


    It's advantage diners. The latest service charge guidelines that Central Consumer Protection Authority (CCPA) has issued against unfair trade practices by restaurants and hotels, ‘carry the power of enforceability,’ which was not the case earlier, Chairperson Nidhi Khare told CNBC TV18.

    The Central Consumer Protection Authority (CCPA) has enough power to take to task the violators of its latest service charge guidelines, said Chairperson Nidhi Khare. "The guidelines CCPA has issued are enforceable," she said. 

    Khare said the CCPA will analyse if there is a particular hotel or restaurant about which there is a stream of complaints. This will help them to start a case. "CCPA has enough power to take violators of this guideline to task," she told CNBC TV18.

    The CCPA on July 4 had barred hotels and restaurants from levying service charge on customers and issued guidelines in this regard to prevent unfair trade practices and protect the interest of the consumers.

    Khare said the Consumer Commission deals with individual complaints and the CCPA has been tasked to take action. "Violations of consumer rights or unfair trade practices are happening as a class. The CCPA will analyse all the complaints that are getting lodged on the National Consumer Helpline," she said.

    Ok to tip, but billed extras unfair and illegal

    The CCPA is not in the business of setting the prices of individual items in restaurants — it’s the additional charges that it will be going after. "What we are saying is additional to the prices on the menu, they cannot charge any kind of service charge or any charge by any other name. What we found unfair was not only were they charging service charge illegally, they were also making the consumer pay extra GST over it, so this is completely unfair," she said.

    Khare clarified that the consumer is of course free to enjoy a meal and tip voluntarily. That’s not barred by any guideline. "So as long as it is voluntary, it is not forced, the consumer continues to pay whatever tip that he wants to pay, but service charge being included in the bill is completely illegal," she said.

    She also said restaurants cannot restrict entry based on payment of service charge. That too is illegal.

    A more aware consumer

    She said only a more aware consumer would resist paying service charge.

    "In the guidelines it is very clearly mentioned now, that if a consumer finds a restaurant or a hotel charging

    Khare said the consumer can lodge complaints on the National Consumer Helpline and upload the invoice where service charge is levied. Action will be taken on pre-litigation settlement. The consumer can also file a complaint at the Consumer Commission.

    She said these steps will empower the consumer. The CCPA has requested all states and UTs to give wide publicity to these guidelines.

    ‘Power of enforceability’

    "The guidelines CCPA has issued are enforceable," Khare said. "Under the amended Consumer Protection Act, we have set up a Central Consumer Protection Authority. The authority has the obligation to ensure that no unfair trade practices happen and it can also under its power issue guidelines to prevent unfair trade practice or to see if cases or violation of consumer rights are happening. Now, under the same obligation, CCPA has issued these guidelines and now they carry the power of enforceability which was not possible prior to this," she said.

    Khare said the guidelines have received a positive response from the people as well as some restaurant associations too.

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