Care industry responds to report from Competition and Markets Authority on unfair care home practices


The Care Provider Alliance has welcomed the final advice published today 16th November 2018 by the CMA entitled ‘UK care home providers for older people – advice on consumer law’.

Many care home associations commented in detail during the consultation phase of the guidance and will each respond to the guidance once they have had the opportunity to review the proposals. Information will be given to providers as appropriate through the individual membership organisations.

However the CPA will be taking forward for the sector two pieces of further work in response to this guidance and it is important that providers note that this work is now ongoing, namely –

  • Firstly, the CPA will develop model contract clauses and support materials to help providers respond to the range of information the CMA is recommending providers give to residents and prospective residents. The CPA will seek to ensure that the clauses, which will not be prescriptive, will support care homes to comply with consumer law. The aim is to produce these clauses by March/April 2019.  The CPA has been liaising with the CMA and the DHSC on this plan and timeframe.
  • Secondly, the CPA will look at how it can support care homes with some suggestions around a fee increase formula that meets the CMA’s guidance that residents understand how fee increases are determined by homes and that the process is transparent.

Finally, the CPA is exploring use of Primary Authority to provide assurance and consistency of interpretation across all areas of the country and more information will be provided on this in due course.

The work is being led on behalf of CPA by Sharon Blackburn CBE, National Care Forum, Ann Mackay MBE, Care England, and Ian Turner RNHA.

The guidance will, says law firm Royds Withy King, have wide-reaching implications for care homes and care providers, requiring them to review the way they operate in terms of admissions procedures, marketing, complaints handling and how they contract with service users. 

Care providers who do not comply with consumer legislation will need to make significant and substantial changes to their service user contracts or risk substantial fines and enforcement action from the CMA, Trading Standards, CQC, and directly from service users.

Hazel Phillips, Head of Royds Withy King’s dedicated Social Care team, said: “The CMA believes that many care providers are breaking consumer law through their current practices.  Its initial report was published at the end of 2017, with its final guidance published today.

“The CMA is already scrutinising the practices of larger operators and we would expect them to shortly turn their sights onto all care providers.  Most service user contracts and admissions documents we see do not fully comply with consumer legislation.  Practices and contracts need to be reviewed and changed as quickly as possible to avoid penalties, legal action or reputational damage.

“CQC are considering their response to the guidance and are likely to take non-compliance into consideration when awarding ratings for the well-led category.”

The CMA has raised concerns around a number of practices including:

  • Inaccurate and misleading information on websites and in marketing materials
  • Charging fees for prolonged periods after death
  • Asking for substantial upfront payments
  • Making hidden charges for ‘extra services’
  • Charging fees for absences
  • Failing to provide contracts, or providing contracts which are vague and unclear
  • Asking third parties to act as a guarantor for care fees in inappropriate circumstances
  • Charging third party top-ups without due regard to the Care Act and Care & Support Statutory Guidance and the NHS Continuing Healthcare framework
  • Increasing fees in an unfair manner
  • Lack of transparency around the treatment of Funded Nursing Care contribution
  • Unfair termination clauses

Hazel Phillips said: “The CMA guidance proposes that care providers provide information in a prescribed way at three separate stages – on first contact, before an offer is accepted, and on confirmation and finalisation of an offer.  Weekly fees charged and what they do and do not cover will need to be made clear.

“Up-front fees and security or reservation deposits will be more closely scrutinised. Already, Sunrise Senior Living has agreed to repay £2m in compensation for charging up-front fees, and we would not be surprised if further compensation payments were to follow in respect of the practices of other providers.”

The CMA guidance restricts charges after death to a backstop period of up to 10 days. 

The Local Government and Social Care Ombudsman welcomed the Competition and Market Authority’s (CMA) guidance to care homes.

Ombudsman Michael King said:

“We welcome the CMA guidance and its call for providers to make sure their complaints handling processes are easy to find, easy to use, fair and effective. We cannot stress enough how important it is for care providers to use the learning from complaints to improve services, so we particularly welcome that this too is included in the guidance.

“From our vast experience of investigating complaints about adult social care, we know just how important it is that people are given information about how and where to complain, including how to escalate a complaint to us, before they make crucial decisions about their care. Clarity and transparency about terms and conditions of contracts are also vital, so care users – and their families and representatives – can make informed choices. We have echoed this in a number of our focus reports and guidance over the past few years.”



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