Following months of complaints, an investigation by the N.C. Attorney General’s Office and threats of a lawsuit, the Ritz-Carlton in uptown Charlotte will refund guests who paid a 15 percent service charge in the hotel’s lounge during the February CIAA basketball tournament.
Attorney General Roy Cooper’s office announced a three-way agreement between the state agency, the Central Intercollegiate Athletic Association and Ritz-Carlton on Monday that details terms of a settlement in lieu of legal action. And while the hotel denies it acted unlawfully, it has agreed to:
▪ Pay refunds to customers who paid the service charge.
▪ Notify customers of special service charges in the menu and have servers remind customers in the future.
▪ Donate $75,000 to the CIAA Scholarship Fund.
▪ Pay the N.C. Department of Justice $5,000 for consumer protection efforts.
“Being upfront with consumers about fees is always the best way to do business,” Cooper said in a statement.
It’s unclear how many refunds will be issued. Before the attorney general’s office threatened to file suit against the hotel, the office had received at least seven complaints from customers who said they were made to pay the service charge.
Heidi Nowak, a Ritz-Carlton spokeswoman, said in a statement Monday the CIAA service charge was added in response to the popularity of the event.
“Information about the service charge was displayed on the Lobby Lounge menus, signs at each bar, and on customer checks,” she said. “We pride ourselves on providing outstanding service to all our guests.”
She said mandatory service charges had been imposed in the lobby lounge in the past for events that “require an expansion of the facilities” to accommodate larger-than-normal crowds, such as the “Holiday Afternoon Tea” in December.
The Ritz-Carlton drew ire after Patrice Wright, an educator from Mint Hill, told media that she paid a $10.20 surcharge on her bill after eating in the hotel’s lobby during CIAA week. The attorney general’s office launched an investigation as more patrons said they paid the unprecedented gratuity, which the hotel distributed in full to its servers.
The Central Intercollegiate Athletic Association is the oldest African-American conference in the nation and has hosted its tournament in Charlotte since 2006. The CIAA plans to move the tournament’s headquarters from Hampton, Va., to Charlotte this year.
Last month, the attorney general’s office accused the Ritz of failing to address several issues and concerns, and said it would file a complaint in court against the hotel. It would have been the first time the state agency has sought legal action against a North Carolina hotel for such a charge.
In a draft of a complaint given to the Observer, the attorney general’s office claimed the hotel violated state law by failing to inform customers of the service charge and misleading customers, some of whom thought the CIAA profited from the surcharge’s proceeds when in fact it had not.
The Ritz said it met with the attorney general’s office several times and responded to all information requests. The hotel also said it was optimistic a resolution could be reached.
On Monday, Wright said she was “delighted” about the situation’s outcome, especially the hotel’s decision to fund a CIAA scholarship – an idea she pushed several times during interviews with national media.
“I’ve always said give that money that was collected for the CIAA surcharge (to) make sure that students are able to stay in school,” she said. “I wanted (the hotel) to be accountable.”
She does have a suggestion for the Ritz-Carlton: “Employ a very, very good diversity manager so they can talk over decisions like this with someone who can be the devil’s advocate,” she said.
She added: “This could’ve been avoided had they just said, ‘maybe that’s not the right thing to do.’”
How to get a refund
Customers have 90 days to claim a refund, following these steps:
▪ File a consumer complaint with the Consumer Protection Division online at ncdoj.gov or call 877-5-NO-SCAM toll-free within North Carolina to request a complaint form in the mail.
▪ Send a letter requesting a refund to: Consumer Protection, Attorney General’s Office, Mail Service Center 9001, Raleigh, NC 27699-9001 and include a copy of the bill, credit card or bank statement or some record indicating the amount of service charge paid.
Note: Previously filed requests for refunds with the Attorney General’s Office will be forwarded. Customers do not need to file a new complaint.