New Delhi, July 19: The Central Consumer Protection Authority (CCPA) has initiated action against 41 restaurants across the country for adding service charges to bills without consumer consent. This decision follows complaints received through the National Consumer Helpline (NCH), which included bills where service charges were automatically included without explicit approval from consumers.
Upon investigation, the CCPA found that adding service charges to bills without consumer consent violates guidelines aimed at preventing unfair trade practices related to service charge collection in hotels and restaurants, as well as protecting consumer interests.
In one notable case, the CCPA imposed a fine of ₹50,000 on Chaayos (Sunshine Tea House Private Limited) and ordered the company to refund the service charges collected from consumers. The authority also instructed the company to modify its software-based billing system across all outlets to ensure that service charges or any other fees are not automatically added to consumer bills in the future.
Further investigations are ongoing for other restaurants that have received complaints and have been scrutinized. According to guidelines issued on July 4, 2022, no hotel or restaurant can automatically add service charges to food bills. Consumers cannot be compelled to pay service charges, and it must be clearly communicated that service charges are entirely voluntary and at the consumer’s discretion.
The guidelines also state that consumers cannot be denied entry or service at a restaurant for opting out of paying a service charge. The CCPA has urged consumers to report any restaurant that adds service charges without permission to the National Consumer Helpline at the toll-free number 1915 or through the NCH platform.
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