North Carolina

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Ritz-Carlton Slinks Away from “Black Tax” Flap, Coughs Up Settlement

9 Jul, 2015

By: Mary Helen Sprecher
Luxury Hotel Chain Added Unapproved Surcharge to Lobby Bar Patrons Attending the Central Intercollegiate Athletic Association Tournament

There are rebates (usually the result of stay-to-play agreements) and there are perks and concessions (often for sports event planners and officials). And while legitimate, they might occasionally cause grumbling from tournament attendees and others.

But it was an all-but-hidden 15 percent surcharge the Ritz-Carlton in Charlotte, North Carolina, added to customers’ bills during the Central Intercollegiate Athletic Association tournament when they patronized the lobby bar that really raised some eyebrows – and plenty of suspicion.

In short, patrons who used the hotel bar found a line item on their tabs, reading, CIAA SVC CHRG. The move was not only unprecedented and added without disclosure, but it was added without the athletic association’s consent.

The Central Intercollegiate Athletic Association is the oldest African-American athletic conference in the nation. It has hosted its tournament in Charlotte since 2006. This year’s tournament was held in late February.

Patrons noticed and weren’t hesitant to theorize as to why the charge had appeared. That, said the Charlotte Observer, led to inflammatory phrases like “black tax” and “race charge” being bandied about.

The North Carolina Attorney General’s Office went into talks with the Ritz-Carlton after the state agency said it planned to sue the hotel for adding the CIAA surcharge to customers’ bills.

The agency’s Consumer Protection Division sent the Ritz-Carlton a draft of a legal complaint asking a judge to bar the hotel from automatically imposing charges without disclosure. The agency also sought restitution and refunds for customers who paid the CIAA gratuity while patronizing the hotel’s lobby bar.

Finally, on July 6, the Ritz-Carlton stated it would repay the charge to all aggrieved customers. WSOC-TV noted that as part of the settlement, the Ritz is required to notify future customers about special service charges. In addition, the luxury hotel chain will donate $75,000 to the CIAA and an additional $5,000 to the North Carolina Department of Justice.

While customers who previously filed complaints with the AG’s office will have their money refunded automatically, others are being asked to make a formal request. The directions are here.

Attorney General Roy Cooper, for his part, is glad to see the matter being resolved, although he has stern words, should any other entity try to do something similar.

"Being upfront with consumers about fees is always the best way to do business," Cooper said.

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