• The Central Consumer Protection Authority (CCPA) announced five guidelines to prevent unfair trade practices and to protect consumer interests regarding the levy of service charges in hotels and restaurants.

Central Consumer Protection Authority (CCPA) :

• The CCPA has been established to regulate matters related to the violation of the rights of consumers.
• The authority was established under the Consumer Protection Act (CPA), 2019, to regulate violations of consumer rights, unfair trade practices, and false or misleading advertisements that are prejudicial to the interest of the public.
• The CCPA has authority to protect, promote and most importantly enforce the rights of the consumers and prevent violation of their rights under the Act.
• It also seeks to ensure that no person engages in unfair trade practices.
• It is also empowered to issue guidelines to enforce the rights of the consumers laid down in the Act.

Service charge:

• A service charge is a tip or a direct transaction between the customer and the restaurant staff, specifically the wait staff.
• It is a fee collected to pay for services associated with the purchase of a primary product or service.
• It is collected by hospitality sectors and food and beverage industries as a fee for serving customers.

New guidelines :

1. Non-misleading and valid Advertisements :An advertisement can be considered non-misleading if it contains true and honest representation of goods and does not exaggerate the accuracy, scientific validity or practical usefulness or capability.
2. Surrogate Advertisements: No surrogate advertisement or indirect advertisement shall be made for goods or services whose advertising is otherwise prohibited or restricted by law.
3. Advertisements Targeting Children: Advertisements that condone, encourage, inspire or unreasonably emulate behaviour that could be dangerous for children or take advantage of children’s inexperience, credulity or sense of loyalty etc. have been prohibited.
4. Disclaimers in Advertisements: The “disclaimers in advertisements” to clarify a claim made in such advertisement or make qualifications or resolve ambiguities. The advertiser must not “attempt to hide material information with respect to any claim made in such advertisement.
5. Duties: The guidelines also impose duties on the manufacturers, service providers and advertising agency to not claim and make comparisons in an advertisement which relate to matters of objectively ascertainable facts.

Model Questions

Q. Consider the following statements :

1. Central Consumer Protection Authority (CCPA) is a statutory body under Consumer Protection Act, 1986.
2. Central Consumer Protection Authority (CCPA) is empowered to issue guidelines to enforce the rights of the consumers.

Which of the statements given above is /are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer : B

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