Restaurant charged service charge without authorisation

robertmoorcock

Hi All,

I am looking for some help.

I ate at Tamarai Thai restaurant in London this weekend and the service was appalling. Too many reasons to go into.

When we came to pay I asked them to remove the service charge from the bill. They refused and said it was compulsory. On the menu it said that 12.5% service will be added to your bill but did not say it was compulsory.

After an argument I paid the cost of the food on my card but not the service. Today I have found that the restaurant put through a second payment on my card to cover the service charge - which I did not authorise.

I have reported this to my bank however I wonder if anyone has had a similar experience and what to expect. Where do I stand legally on this?

antrobus

robertmoorcock wrote: »

...
I have reported this to my bank however I wonder if anyone has had a similar experience and what to expect. Where do I stand legally on this?

You can dispute the charge with your CC provider and insist on a chargeback. The legal position is no different than normal; the service charge levied by the restaurant is a fee charged for a service, if the restaurant fails to provide the service it isn't entitled to the fee.

Voyager2002

You were right to contact your bank: since it was an unauthorised transaction they should reverse it.

A separate issue: the restaurant might be able to argue that you were obliged to pay the service charge as part of the contract into which you entered by dining there (actually a grey area, and the whole law governing eating in restaurants is quite interesting). However, the way to seek redress would be through the courts rather than by taking an unauthorised charge.

Voyager2002

antrobus wrote: »

You can dispute the charge with your CC provider and insist on a chargeback. The legal position is no different than normal; the service charge levied by the restaurant is a fee charged for a service, if the restaurant fails to provide the service it isn't entitled to the fee.

I think you miss the point: even if the customer was indeed obliged to pay the charge, the restaurant cannot put through an unauthorised transaction. The bank ought not to get involved with whether or not the service was actually provided (that is a matter for the courts). The only question the bank should be asking should be whether or not the cardholder authorised this payment.

antrobus

P.S. Which does have a useful page on the subject at

http://www.which.co.uk/consumer-rights/making-a-complaint/dealing-with-restaurant-problems/your-rights/

It does say that "If a service charge is automatically added the restaurant must, by law, warn you of this before you eat.The charge must be clearly displayed on any price list or priced menu inside or outside the restaurant."

and suggests reporting the restaurant to Trading Standards if necessary as "unclear or misleading pricing is a criminal offence, according to the Consumer Protection from Unfair Trading Practices Regulations 2008".

antrobus

Voyager2002 wrote: »

I think you miss the point: even if the customer was indeed obliged to pay the charge, the restaurant cannot put through an unauthorised transaction. The bank ought not to get involved with whether or not the service was actually provided (that is a matter for the courts). The only question the bank should be asking should be whether or not the cardholder authorised this payment.

I think I get the point exactly. I simply stated what you stated, only I did so in fewer words, and posted a minute earlier than you did.

Ben8282

The point here is that the customer paid the bill and the restaurant then put through a second charge.

The first question is how, without the cardholder entering his pin or the restaurant having the card number. How did they get the full card number and details necessary to put this second charge through?

The second charge can be disputed as fraud. The restaurant is not a hotel, car hire company etc who may reasonably put through an extra charge afterwards. It is a restaurant. If the restaurant staff accepted payment for a lesser amount and allowed the customer to leave, they have no right to use the card to obtain the balance or make additional charges to the card without authorisation. What if the cardholder had paid cash?

Dispute now. The bank will investigate and find the charge has been keyed, no pin entered, no signature. The dispute will be upheld. Any other consideration is not relevent. If the restaurant has a civil dispute with you over non-payment of their service charge, then they must pursue you through the courts, not debit your card without authorisation.

pheonixrising21

I thought that when it comes to paying restaurants, you were legally entitled to pay what you thought the meal was worth? I.e. if the price of the meal was £100 and you only thought it was worth £70, you pay £70 (and inform the staff of the reasons why you are under-paying).

Anyway, the above is irrelevant, the charge was not authorised. I would be very interested to know how they got the details to be able to do this - I thought chip and PIN was meant to be secure?

Also, pay in cash next time, they can't make any additional charges then!