The Competition & Markets Authority (CMA) means business. Care UK – a major care and health provider – will face legal action unless it refunds the “administration” fees it was charging to 1,600 residents¹. These compulsory fees were sometimes as much as £3000.
The CMA makes it clear that it is not OK to advertise services that are simply not provided
It’s not often it happens, but we were genuinely excited when the CMA brought out its long awaited guidance on care home contracts and consumer law last month. There is now clarity about the topic which should become an invaluable resource to care home providers, advisers and consumers alike.
“Guidance” in this case really means business. It shines a clear light on the confusing world of consumer law and the often bewildering information on contracts given by some providers.
R&RA’s Helpline hears too many nightmare stories from people trying to find good care at a cost they can afford amongst the smoke and mirrors of care home sales pitches and opaque contracts, often with onerous terms. Having moved a relative in, few are willing to move them. They are often exhausted by the process anyway and feel that they will ‘all be the same’, ending up guaranteeing fees they cannot afford, or paying extortionate “administration” fees for simply providing the contract.
The CMA goes even further and makes it clear that it is not OK to advertise services that are simply not provided, such as activities and outings, which causes relatives utter dismay.
What’s more CMA have alerted the sector to their intention to review the sector again next year, but are clear that they will take action against those falling foul of consumer law now. This was demonstrated when they secured £2million in compensation for residents in Sunrise Senior Living in May this year as well as their action in making other homes stop charging after death fees.
So it seems this regulator has teeth, and isn’t frightened of using them if that’s what it takes to bring about much needed transparency to the market.
To read more about this guidance here
¹ Based on Care UK’s own figures