Industry News

UK: Action against care home providers who continue to charge after death

Monday, 4 December, 2017

The Competition and Markets Authority (CMA) is taking direct action against some unnamed care home providers who are continuing to charge the estates of deceased self-funding residents for up to four weeks after death.

The CMA has been investigating the scandal since June 2017, along with the equally common practice of forcing self-funding clients to pay unreasonably high moving-in fees – sometimes as much as GBP5,000 to be paid in advance.

As a starting point, the CMA has written to the offending providers, setting out its position that their contract terms are in breach of consumer law.

Separately, the CMA is also conducting a study of whether the elderly care home and nursing home services market is working well for residents, and is enabling business to compete fairly. It says it has identified several other consumer protection concerns: one is that people who pay for their own residential care home places are being charged GBP12,000 per year more than councils pay for the residents whose fees they cover. Average fees for self-funders are now nearly GBP850 a week, compared to the GBP620 paid by councils (although the numbers vary sharply from place to place).

The authority's chief executive, Andrea Coscelli, insisted that some discounting to local authorities was acceptable, but that matters had gone too far. Self-funding residents are, in effect, being charged a premium because councils are not paying enough to cover the costs of places for poorer residents. The fee discounts for local authorities have led to a GBP1 billion funding shortfall for care homes across the UK, and the CMA says the current system is not sustainable without additional funding.

'We will be taking steps to assist care homes in understanding their obligations, but we are also taking enforcement action now on some issues where we believe the law is being broken', said Coscelli. 'It is essential that residents and their families can make informed choices, understand how these services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have concerns.'

However, the CMA is not naming the organisations subject to its enforcement action, noting that only a court can decide whether a particular term or practice infringes the relevant law - the Consumer Protection from Unfair Trading Regulations 2008 and Part 2 of the Consumer Rights Act 2015.

It aims to consult on new guidance on fees charged after death in early 2018. Later that year, it will consult on wider guidance on the standards of behaviour expected of care homes.

Sources

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