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Hidden charges when ordering food: Minister says it's against the law
Have you ever picked a meal based on its advertised price, only to pay more at checkout?
For many food delivery and restaurant customers, the final bill comes as a surprise, with additional charges such as sales and service tax and platform fees only added at the end of the transaction.
However, the Domestic Trade and Cost of Living Ministry says restaurants and food delivery platforms cannot...
Have you ever picked a meal based on its advertised price, only to pay more at checkout?
For many food delivery and restaurant customers, the final bill comes as a surprise, with additional charges such as sales and service tax and platform fees only added at the end of the transaction.
However, the Domestic Trade and Cost of Living Ministry said restaurants and food delivery platforms cannot advertise prices that exclude such charges, warning that offenders could face penalties under the Price Control and Anti-Profiteering Act 2011 and the Consumer Protection Act 1999.
Its minister Armizan Ali (above) said concealing additional charges until the final stage of a transaction not only confuses consumers but also undermines their right to make informed decisions.
Speaking to Malaysiakini, he said his ministry found that the practice was widespread and would step up enforcement from January 2027.
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"That is why we will start focusing on advocacy and enforcement. Traders and relevant parties must take note and take immediate steps to ensure compliance.
“We will begin full enforcement in January," he said, adding that the awareness drive would include engagement with food delivery platforms.
The Papar MP said between 2023 and this year, the ministry had opened 64 cases and issued compounds against business operators for violating Section 10B of the Price Control and Anti-Profiteering Act, which requires advertised prices to be all-inclusive.
In a parliamentary reply yesterday, Armizan explained that the provision requires anyone displaying, advertising, publishing or quoting prices of goods or service charges to include all taxes, duties, government levies and other applicable charges in the displayed price.
"This means consumers must be able to see the amount they are required to pay, rather than only being informed of certain charges at the final stage of a transaction," he said, in response to a question from Mersing MP Islahuddin Abas.
Ministry's guidelines
Armizan said the law was further reinforced by the ministry’s guidelines on the implementation of the all-inclusive pricing policy, introduced in 2018.
The guidelines cover the food and beverage sector as well as e-commerce and delivery transactions, requiring the displayed final price to include components such as the basic price, service charges and delivery fees before consumers confirm their orders.
/file/publisher-c1a3f893382d2b2f8a9aa22a654d9c97/2021/07/1a8ebe2650815fc67334a51cdfbc3b68.jpg "Generic food delivery tapau bungkus makanan take away. Pix Mukhriz Hazim 290721 04")
Individuals found guilty of violating Section 10B can be fined up to RM50,000, jailed for up to two years, or both. Where the offence involves a corporation, the company can be fined up to RM100,000.
Separately, Armizan said the Consumer Protection Act also makes it an offence for traders to mislead consumers about the prices of goods or services.
Under the Act, a price representation is considered misleading if the displayed price gives the impression that it covers all costs when additional charges are, in fact, imposed separately.
Armizan also urged consumers to check the final price before making payment and lodge complaints with the ministry if they encounter hidden charges or discrepancies between advertised prices and the amounts ultimately charged.
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Here are the potential loopholes, consumers always paid more. 1. Tax on profit: You pay SST / GST on their profit, not on the real cost of goods. 2. Consumer pay extra service charge (>10%) on top of GST/SST at the bottom of bill. 3. Fake tax: Shop not registered, but charges you GST and keeps it, worse of all, if all middlemen cascading it, actual tax on consumer is >>> 6% 4. No bill, no proof: No e-invoice, so you cannot complain or claim. Excuse with system down. 5. Hidden fees at counter: No price display, extra fees added when you pay. 6. Round up every bill: 1 sen or 2 sen extra per bill, big profit daily. 7. Raise price when opportunity arises, blame tax: Price up 10% to 20% first, then say "because SST / GST". After implementation by gov, add another round of GST /SST. Why not ? 8. Tax on tax-free goods: Charge tax on basic food that should be 0%.
Be consistent with implementation to cover all industries. The traders got more than a month to look for loopholes. The Ministry also got more than a month to close all the loopholes. Lets see who is smarter.
When is the Govt going to control the arbitrary charged service charge of up to 10% at food outlets?I can understand that 4 or 5 stars hotels charge them as they have nice lobbies, lifts and even air-conditioned toilets.Some of these food outlets are without toilets, wash basins and even poor waiting services.This is causing unnecessary and indirect increase in food and drinks costs.
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