Are some residential care homes breaking consumer law?

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On 13 June 2017, the CMA opened an investigation into a number of care home providers, due to concerns that some of the contract terms and/or practices they use may breach consumer law. At the moment the focus of this case is on self-funding residents and the issues of large upfront fees and the fees charged after a resident’s death.

 

The CMA has today published the initial findings of its care homes market study, and is investigating if some care homes are breaking consumer law.

 

The market study was launched in December 2016 to examine whether the residential care homes sector is working well for elderly people and their families. Having reached the halfway point of the study, the Competition and Markets Authority (CMA) today published emerging findings and announced that, as a result of information received during this work, it has opened a consumer protection case to investigate its concerns that some care homes may be breaking consumer law.

 

This is focused on concerns about certain care homes charging families for extended periods after a resident has died, and homes charging large upfront fees.

The initial findings of the market study highlight wider concerns about the sector, which will form the focus of the next phase of its work. These include:

  • People are struggling to make decisions about care: Prospective care home residents and their families need to be able to make informed choices, often under stressful and time-pressured circumstances. However the CMA’s initial findings suggest that many people find it difficult to get the information they need, are confused by the social care system and funding options, and do not know how to find and choose between homes.
  • Complaints procedures are not functioning well: It is not realistic for many residents to move home if they are dissatisfied with the care they are receiving, as to do so would be distressing and harmful to their health. It is therefore essential that effective systems are in place for them to be able to complain and, where necessary, have these concerns acted upon. Our initial findings, however, indicate that redress systems often do not work well, and residents can find it very challenging to make complaints.
  • While many care homes offer a good service, there are concerns that some might not be treating residents fairly and that certain practices and contract terms might break consumer law. As well as the issues on large upfront fees and fees charged after death, which we are investigating in the consumer protection case, we are concerned about other consumer protection issues such as a lack of information about prices on care home websites, and care homes’ contracts giving homes wide-ranging discretion to ask residents to leave, at short notice.
  • The sector is not positioned to attract the investment necessary to build greater capacity needed for the future: Demand for care home services is expected to increase substantially, with the number of people aged 85 and over projected to more than double by mid-2039. The level of care they require is also expected to increase as, having spent longer in their own homes; they will be frailer when they do move to a care home. At present, short-term public funding pressures and uncertainty mean the sector is not incentivised to undertake the investment necessary to meet future demand.

 

Acting Chief Executive, Andrea Coscelli, said:

Some of the most vulnerable people in our society use care homes, often moving to them under extremely difficult circumstances. It’s therefore essential they are able to make informed choices, understand how services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have any concerns.

We also have particular concerns that some care homes might be breaking consumer law and have opened a consumer protection case to investigate further.

Demand for care home places is expected to surge over the next 2 decades. To make sure the additional capacity this requires is available, it needs to be built in good time. At present, short term funding pressures and uncertainty mean that the sector is not attracting investment. We will be focusing on finding ways to deal with these, and other concerns identified.

The CMA has already begun to develop recommendations to protect residents and their families, which will be expanded over the next half of the market study. These include examining how:

  • People can be actively supported in making choices
  • Complaints and redress systems can be significantly improved to help people feel more comfortable reporting concerns
  • Residents and their families can best be protected, and how to encourage fair treatment by care homes
  • Local authorities can be encouraged to share best practice in procuring care home services and planning, and developing provision in their areas
  • To encourage investment for the future

The next phase of the CMA’s study will focus on developing and refining these recommendations to ensure they are robust and practicable, and can help make real improvements to the way the sector works. CMA will be seeking views from national and local government, as well as regulators and the industry in each country of the United Kingdom, to ensure these recommendations can be effectively implemented.

The CMA will continue to look at the consumer protection issues identified during the first half of the market study and will consider how best to address these, including by extending the scope of its consumer protection case.

 

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