CCPA acts against 41 restaurants for default service charge

CCPA action on default restaurant service charges: what happened?

Tips and service charges must be voluntary. Automatic adds on bills hide the choice. CCPA’s guidelines ban default service charge and any renamed forced fee.

• Guidelines: no automatic service charge; no collection under another name; must tell consumers it is voluntary; no restriction on entry for refusal.
• Delhi HC held mandatory collection contrary to law and said CCPA may enforce the guidelines.

What is CCPA?

• Central Consumer Protection Authority under the Consumer Protection Act, 2019, which can act against unfair trade practices and protect consumer interest.

What do the guidelines require?

• No hotel or restaurant shall add service charge automatically or by default.
• No collection under any other name.
• Consumers must be clearly told it is voluntary and optional.
• Refusal must not bring restricted entry or service.

Why does CCPA action on default restaurant service charges matter?

What are the challenges in CCPA action on default restaurant service charges?

• Compliance across thousands of outlets needs sustained checks.
• Renaming the charge can still confuse diners.

What should be done next on CCPA action on default restaurant service charges?

• Conclude investigations on the 41 cases.
• Widen NCH-based monitoring.
• Publicise that tips remain voluntary.

What can Prelims ask on CCPA action on default restaurant service charges?

• CCPA; 41 restaurants; guidelines 4 Jul 2022; CPA 2019 s.2(47).
• Delhi HC 28 Mar 2025 upheld guidelines.
• Service charge must be voluntary, not default.

How to write about CCPA action on default restaurant service charges in Mains

Practice question (10 marks, 150 words): Why is a default restaurant service charge treated as an unfair trade practice?

• Intro: 41-restaurant action.
• Guidelines 2022.
• s.2(47) CPA.
• Delhi HC.
• Conclusion: consent and transparency.