Consumer law ensures people are given the information they need to make informed choices. It gives important protections to residents and their representatives, alongside the standards and regulations enforced by sector regulators. People should be confident they will be treated fairly and should be able to complain effectively if they have concerns.
It is vital that, if you’re running a care home, you understand how consumer law affects you. Our advice sets out the standards that we expect all care homes to follow. It is relevant to care homes whether residents pay their own fees or are funded by the State.
Remember that you are dealing with people who may be very vulnerable. They may be frail, in poor health, or under a lot of pressure and emotional stress. You should consider the difficult circumstances people might be in and their unfamiliarity with the process of choosing a care home.
Caring about the market
In December 2016, we launched a UK-wide market study into care homes to examine how well the market was working, including whether care homes were treating residents and their representatives fairly.
One of the reasons we launched this study was because concerns had been raised that some care homes might not be complying with consumer law. Charities such as Age UK and Citizens Advice thought that some care homes were, for example, imposing hidden charges or giving very short notice periods for fee increases.
Our final findings report was published in November 2017. Whilst recognising that the sector performs a vital public service and is staffed by many dedicated and caring individuals, the report found that some residents were at risk of being treated unfairly.
It identified concerns about some care homes’ practices and contract terms. These included:
- A lack of indicative pricing information on websites.
- Contracts only being provided very late in the admissions process or after the resident had moved in.
- Charging of compulsory upfront fees.
- Deposits not being effectively protected against the risk of insolvency.
- The charging of fees for an extended period after a resident had died.
We were also told that some residents and their representatives found it difficult to make complaints, partly because complaints systems can seem complex to use, but also because the person lodging the complaint might be afraid of reprisals.
It should also be noted that, once in a home, very few residents are willing or able to move. Therefore, they might find it difficult to change homes and could be more vulnerable to unfair treatment, particularly if they are self-funders.
Homing in on compliance
During the market study, we opened an investigation into a number of care homes’ contract terms and business practices.
This investigation has already led to positive changes in the sector. We secured more than £2m in compensation from one large care home provider as part of an investigation into the charging of compulsory upfront fees, and have told another large provider that it will face legal action unless it refunds over 1,600 residents who paid a compulsory upfront ‘administration’ fee of as much as £3,000.
Other homes have also dropped contract terms relating to the charging of fees for extended periods after a resident’s death.
What does the CMA’s advice cover?
Following the CMA’s market study, we published two pieces of advice on complying with consumer law. Our consumer law advice on the charging of fees after death was published in May 2018. More recently, we have published further comprehensive advice to help care homes understand their responsibilities and obligations under consumer law.
The advice has been developed with constructive engagement from the sector, including care homes and their representative bodies, and following a public consultation.
The advice sets out what care homes need to do to ensure they are treating residents and their representatives fairly. In particular, this includes:
- Providing upfront information – what information homes should give to potential residents and their representatives, and when, to help them make informed choices.
- Treating residents fairly – what homes should do to make sure that their contract terms and the way they treat people are fair.
- Quality of service – how homes must ensure their services to residents are provided with reasonable care and skill.
- Handling complaints – how to handle complaints fairly and make sure the complaints procedure is easy for people to find and use.
Care homes must give people certain key information on first contact. This includes information about whether they accept self-funded and State-funded residents, key features of the service and how much people will have to pay to stay in the home. This information should be highlighted on the care home’s website and in any information packs or other written materials people are given, and should be explained upfront during initial telephone enquiries and at the beginning of any first visit.
Care homes should also actively provide important additional information, such as information about any trial period and the basis for asking residents to leave, when people want or need it, and in sufficient time for them to be able to consider it before they agree to have a care needs assessment with the home. This additional information should be easy to find on the home’s website, included in information packs, and explained to people on any follow-up enquiry.
Treating residents fairly
When someone signs a contract with a care home, the terms of that contract must be fair under consumer law, otherwise they are unenforceable. There are some key principles care homes need to follow. For example, terms must:
- Explain all the rights and responsibilities between the care home and the resident.
- Be simple, clear and easy to understand.
- Not give the care home more rights than the resident.
- Be written and agreed in a fair and open way.
Examples of terms which may be unfair include those that: tie residents to ‘hidden’ terms that they haven’t had the chance to read and understand; do not hold the care home responsible if things go wrong when it is the care home’s fault; or that allow the care home to make unexpected changes to a resident’s fees.
Care homes must also not:
- Mislead residents and their representatives, for example, about their right to claim compensation if things go wrong.
- Abuse their position of power to apply pressure, as this could limit people’s freedom of choice.
Quality of service
If care home staff do not act with reasonable care and skill, residents may be able to claim compensation for breach of contract.
Sector regulators enforce regulations that a care home must follow to provide a quality service. For example, the building and equipment must be suitable and safe, and residents must be treated with dignity and respect. If a care home does not follow the rules and requirements set by regulators, it may also be breaking consumer law.
Every care home should have a quick, simple and streamlined procedure for resolving complaints. Staff must never pressure or intimidate someone against making a complaint, for example by threatening to restrict or ban visitors or asking a resident to leave if they have complained.
Homes should have a written complaints procedure and ensure it is possible to make complaints in a variety of ways. Information on how to make complaints should be offered, as far as possible, in different languages and formats and care homes should explain how a resident can access independent advocacy or advice services and where they can go, such as the Ombudsman, if they remain unhappy with how their complaint has been dealt with.
We will be carrying out a review in late-2019 to assess care homes’ compliance with consumer law and the progress that has been made since we published our advice. This will include, where necessary and appropriate, requesting information from care homes and asking them to demonstrate how they are complying with the law. We will work closely with other regulatory partners in holding care homes to account.
If we find serious instances where care homes are breaking consumer law, either through our ongoing monitoring or during our review, further enforcement action could be taken. This may include taking a care home to court to get it to change its business practices or contract terms, requiring it to pay money back to residents, or even bringing a criminal prosecution, so it’s important to ensure you comply with the latest advice.
We also intend to provide appropriate support to other stakeholder initiatives that will help to further embed our consumer law advice. For example, our market study recommended that the industry develops ‘model contracts’ for use by care homes with self-funding residents.
We think this would help to address the variability we found in the user-friendliness and intelligibility of contracts for self-funders, encourage best practice across the sector, and ease the workload of care homes in designing and updating their individual contracts to comply with the law.
Following this recommendation, the Care Provider Alliance in England is now intending to produce model contract clauses and supporting materials for its member care homes.
A short guide is available, ‘UK care home providers for older people – advice on consumer law’, as well as an open letter to care home providers. More information can be found on the CMA web page.
How do you ensure you’re compliant with consumer law? What are the difficulties you face? Feed-back on this feature and share your thoughts in the comments section below.