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CMA begins proceedings against Barchester over administration fees

April 9, 2020

The Competition and Markets Authority (CMA) has begun proceedings against major provider Barchester Healthcare after what the CMA alleges to be that company’s failure to compensate residents’ families for administration fees charged following a resident’s death.

In July 2019 the CMA issued a letter before action to Barchester, saying the CMA believed Barchester was breaking consumer protection law by requiring a substantial non-refundable upfront administration fee from residents for which they received no services or products in return. The letter said the CMA believed the company’s description of the charge, and what it was for, was misleading and that residents were told about the fee too late in the admission process. With regards to fees charged following a resident’s death, the CMA says it believes that Barchester was breaking consumer protection law by charging the fee for a period longer than outlined in the CMA’s guidance.

Although Barchester stopped charging an administration fee in January 2019, the CMA says the company has not provided the CMA with satisfactory undertakings, including provision for financial redress for consumers in relation to the administration fee.

Earlier this week, the CMA said it now intends to issue a claim against Barchester seeking enhanced consumer measures including financial redress for consumers from 1 October 2015.

In a statement, Barchester told Caring Times the company was “deeply disappointed” that the CMA had chosen to issue court proceedings at this difficult time.

“The care sector is on the frontline, working shoulder to shoulder with the NHS, in the battle against Covid-19 – fighting to protect the vulnerable from this terrible disease,” said Barchester’s statement.

“For us, the timing of their decision underlines our belief that they do not fully understand the care sector. We have been working with the CMA for months now, and despite fundamentally disagreeing with their proposals, we have compromised and made amendments to our fees to align with the industry, whilst trying to hold firm on what we believe is right for our customers and the service we deliver.

“We have changed the after death fee from 14 days to seven days, as we know from years of supporting and caring for residents and their families that at a highly emotional time it is important that we don’t impose further distress by serving notice too quickly. We no longer charge a placement fee, but include this charge in the weekly fee which customers have accepted. This is a charge for ensuring that we deliver an upfront service that is comforting and supportive for residents, families and our staff, including a robust pre-admission assessment, amongst other things. We strongly believe that our approach is customer focused and have asked on many occasions for evidence to the contrary from the CMA. No evidence has been forthcoming.”

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