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CMA publishes final consumer law guidance to care homes

November 19, 2018

Final guidance on how care home operators should frame placement contracts and meet consumer law obligations was published late last week  by the Competition and Markets Authority (CMA).

Care home operators who fail to follow the guidance may face action from the CMA, Trading Standards, or others, who can bring court proceedings, seek compensation on behalf of residents and bring criminal prosecutions.

The CMA guidance covers what information care homes must give to prospective residents and their families, and highlights how providers can ensure contract terms are fair, and how to handle complaints fairly.

“Prospective residents and their families need clear, accurate, prominent and timely, upfront information,” the guidance warns.

“For example, not being able to find the necessary information about pricing and terms and conditions on a provider’s website, or receiving key information only after someone has already expressed an interest in moving into a home, is likely to affect a prospective resident and their family’s ability to make informed decisions.”

The CMA guidance is explicit and includes:

• A requirement to provide key information upfront and in a timely manner, including on websites, so that potential residents and their families can make an informed decision before signing a contract – including full, accurate and up-to-date fee breakdowns.

• Contract terms must be clear, easy to understand and accessible. For example, terms contained in multiple documents located in different places may be considered ‘hidden’ and therefore unfair under consumer law.

• Fee increase terms need to be treated with great care, and must not allow providers to increase fees arbitrarily. Fee variation terms should set out clearly the circumstances in which the resident’s fees may change and the method of calculating the change.

The CMA says care homes must draw key information to prospective residents attention when they first contact and explain:

• Which residents the care home accepts (e.g. state and self-funded).

• The type of care offered.

• An overview of the rooms, facilities and services available to residents.

• Pricing (including any upfront payments) and service.

• The size of the home (i.e. how many beds it has).

• A brief description of staffing arrangements.

• Highlight any surprising or important terms and conditions, such as any requirement for self-funders to demonstrate they can pay for their own care for a minimum period of time and how self-funded residents’ fees may change during their stay.

• An accurate and representative indication of the total weekly fee rates typically charged for self-funders, for each type of care service offered. What services are included in weekly fees and any optional, additional ‘extras’ which are not included and may need to be paid for separately.

• Any significant, additional costs that may be unavoidable for some residents because of their circumstances (e.g. where staff need to accompany them to medical appointments).

• Details of upfront payments required, e.g the amount of a deposit, the risk it protects the operator against, how it will be protected and refunded.

The CMA says care home providers should explain all the key information at the beginning of their first visit to a home (i.e. before they are shown around) and ensure that prospective customers are provided with the key information in written form to take away. Staff should be trained to provide this information.’

In an open letter to care providers published at the same time as the guidance, the CMA said that it and other enforcers, such as Trading Standards Services, could take action against care homes that don’t comply with consumer law.

The CMA has already taken action against some care home providers in relation to the charging of certain upfront fees and charging fees for extended periods of time after a resident’s death. ‘

The CMA will be carrying out a compliance review, starting in November 2019, to assess the level of compliance by care homes with consumer law, and the progress made since publication of today’s advice.

The regulator is also publishing a guide for potential care home residents to make sure they are aware of their rights.

  • To read the CMA guidance go to: https://www.gov.uk/cma-cases/care-homes-market-study

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