Service charge unfair if customers nod not taken

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We are sending a news item published in Times of India, Delhi edition dated 30th November 2016 on service charges being levied by hotels and restaurants which is reproduced below. It is also on their website http://timesofindia.indiatimes.com/india/Govt-Service-charge-unfair-if-customers-nod-not-taken/articleshow/55696072.cms

NEW DELHI: Authorities can order action against hotels and restaurants which levy” service charge” in the bill without the knowledge and consent of consumers on charges of indulging in “unfair trade practices”, the Union consumer affairs department has said. Consumers can file complaints in consumer courts against such practices, the Centre has told Parliament.

A department official said they would issue a clarification for wider dissemination of this view. “We will also issue an advisory to hotels and restaurants to display prominently that consumers have a choice to pay or not pay the charge. Charging anything without informing them falls under unfair trade practice,” the official said.

The finance ministry has told the Lok Sabha that the consumer affairs department was aware that hotels and restaurants are including “service charge in lieu of tips” in food bills.

Sources said the government had received several complaints of hotels and restaurants including service charge in their bills through the national consumers’ helpline. “We had even asked the hoteliers and restaurant operators, who had responded saying that it’s optional for the consumers to pay the charge,” another consumer department official said.

According to the Consumer Protection Act, any trade practice for sale or service that adopts unfair or deceptive method falls under the category of “unfair trade practice” and the law provides for redressal of such grievances. The government is in the process of amending the Act to include stringent provisions to act against unfair trade practices to protect consumers.

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