What is the role of CCPA?

• The Central Consumer Protection Authority (CCPA) directed hotels and restaurants not to levy additional charges, such as “LPG charges”, “gas surcharge” and “fuel cost recovery”, in consumer bills. 

• The CCPA has observed, based on grievances received on the National Consumer Helpline (NCH), and media reports, that certain hotels and restaurants are levying such charges in the consumer bill by default, over and above the price of food and beverages displayed in the menu and applicable taxes. 

• The CCPA termed it an unfair trade practice under the Consumer Protection Act, 2019. 

• The Authority has issued an advisory directing that no such charges shall be levied automatically, and warned that violations may invite strict action.

• The CCPA has clarified that input costs such as fuel, LPG, electricity, and other operational expenses are part of the cost of running a business and must be factored into the pricing of menu items. 

• Recovery of such costs through separate mandatory charges constitutes an unfair trade practice under Section 2(47) of the Act.

• The price displayed in the menu should be the final price, exclusive of applicable taxes.

Central Consumer Protection Authority (CCPA)

• The Consumer Protection Act, 2019 was notified on August 9, 2019 and came into force on July 20, 2020. 

• It replaced the Consumer Protection Act, 1986.

• Under the provisions of the Act, the Central Consumer Protection Authority (CCPA) was established in July 2020. 

CCPA is empowered to:

a) Protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act.

b) Prevent unfair trade practices and ensure that no person engages himself in unfair trade practices.

c) Ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made thereunder.

d) Ensure that no person takes part in the publication of any advertisement which is false or misleading.

• The CCPA can make interventions when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products. 

• The CCPA has an investigation wing, headed by a director-general, which may conduct inquiry or investigation into consumer law violations. 

• The CCPA has been granted wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than one individual.

• The power of CCPA to take class action is a unique feature of the new Act. Earlier, there was no mechanism to deal with issues of unfair trade practices and misleading advertisements which impacted consumers as a class. As a result, such practices continued unrestrained without any accountability. 

• The CCPA has powers to pass orders of discontinuation of practices that are unfair and prejudicial to consumers’ interests and impose penalties in case of false or misleading advertisements.