Flagging ‘forced’ service charge, Govt calls restaurant owners for meeting

Flagging ‘forced’ service charge, Govt calls restaurant owners for meeting

India News

STATING THAT consumers are being “forced to pay service charge, often fixed at arbitrarily high rates”, the Department of Consumer Affairs has called a meeting with restaurant owners on June 2.

This comes days after Consumer Affairs Secretary Rohit Kumar Singh raised the issue in a letter to the National Restaurant Association of India. He told them that restaurants and eateries are collecting service charges from consumers by default, although it is supposed to be voluntary and at the discretion of consumers.

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“It has been pointed out in the letter that consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants. Consumers are also being falsely misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount,” said a statement issued by the Department of Consumer Affairs on Monday.

“Since this issue impacts consumers at large on a daily basis and has significant ramification on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail,” it said.

According to the statement, four key issues “pertaining to service charge levied by restaurants” will be discussed at the meeting: restaurants making service charge compulsory; adding service charge in the bill in the guise of some other fee or charge; suppressing information from consumers that service charge is optional and voluntary; and embarrassing consumers in case they resist from paying service charge.

Pointing to the guidelines issued by the department in April 2017, the statement said: “The guidelines note that entry of a customer in a restaurant cannot by itself be construed as a consent to pay service charge. Any restriction on entry of the consumer by way of forcing her/ him to pay service charge as a condition… to placing an order amounts to ‘restrictive trade practice’ under the Consumer Protection Act”.

“The guidelines clearly mention that placing of an order by a customer amounts to his/ her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the afore-mentioned, without express consent of the customer. would amount to unfair trade practice as defined under the Act,” it said.

“As per the guidelines, a customer is entitled to exercise his/ her rights as a consumer to be heard and redressed under provisions of the Act in case of unfair/ restrictive trade practices. Consumers can approach a Consumer Disputes Redressal Commission / Forum of appropriate jurisdiction,” it said.

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