CCPA initiates action against 41 restaurants over service charge; Chaayos and Barbeque Nation included

The Central Consumer Protection Authority (CCPA) has initiated suo motu action against 41 restaurants across the country, for allegedly violating its guidelines to Prevent Unfair trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants.

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CCPA initiates action

The action comes after consumers reportedly submitted complaints through the National Consumer Helpline, alleging that service charges had been added automatically to their bills without their consent.

The CCPA guidelines, upheld by the Delhi High Court, clearly state that the payment of service charges is totally up to the discretion of the customer and the restaurant cannot refuse their services to the ones who decline to pay those charges.

CCPA investigated the complaints and said in a statement, “Based on these complaints, CCPA conducted investigations and found that the automatic levy of service charge violated the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants. The Authority also found that such practice amounts to an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019.”

Chaayos and Barbeque Nation are among the penalised restaurants

The CCPA said it has already passed a final order against Chaayos (Sunshine Teahouse Pvt. Ltd.), imposing a penalty of ₹50,000 for levying service charges.

The other penalised restaurant establishments include Cafe Blue Bottle, Patna; China Gate Restaurant Pvt. Ltd.; Fiesta Barbeque Nation (Barbeque Nation Hospitality Private Limited); FOO Ahmedabad Restaurant (Pebble Street Hospitality Pvt. Ltd.); L’Opera French Bakery Private Limited; and Zorro.

The Ministry of Consumer Affairs, while stating that the CCPA remains committed to safeguarding consumer rights and ensuring fair, transparent and consumer-friendly business practices, also added that the authority “continues to closely monitor complaints relating to service charge and will take appropriate action against establishments found to be violating the Consumer Protection Act, 2019 and the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants.”

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FAQs

1) Against how many restaurants have CCPA taken suo motu action?

CCPA has taken suo motu action against 41 restaurants across the country, including Chaayos and Barbeque Nation.

2) Why was the action taken?

The action was taken after the authority received several complaints regarding the levying of service charges by default in the bills of the restaurants and hence, initiated such action.