Care Home Company Ordered to Pay Over £2 Million in Compensation

The Competition and Markets Authority (CMA) has secured more than £2 million in compensation for residents of a major care homes group as part of an investigation into compulsory ‘upfront fees’.

The company has been ordered to give money back to the vast majority of residents who paid such fees since 1 October 2015 and who left within 2 years of moving into one of the company’s care homes.

The move comes as part of the CMA’s ongoing investigation into how some care homes charge for their services.  This uncovered that Sunrise’s description of its upfront fee – running to several thousands of pounds per person – and how it would be used, was unclear.  Moreover, prospective residents were having to pay out before they had secured a place at the home.

The CMA also raised concerns that the fee was non-refundable once someone had lived in the home for more than 30 days.

On top of individual pay-outs of, on average, £3,000, Sunrise has provided legally-binding commitments to stop charging these upfront fees altogether for future residents.  They have also agreed to abide by new CMA guidance about the charging of fees after a resident has died, which is soon to be finalised and published following a consultation.

George Lusty, the CMA’s Senior Director for Consumer Protection, said: “Care home residents shouldn’t be required to pay out thousands of pounds without being clear what they’re getting for their money.  So, it’s only right that residents at Sunrise care homes will now receive compensation if they’ve paid these fees, and that future residents won’t have to make such payments at all.

 

The CMA welcomes Sunrise’s constructive engagement and co-operation throughout our investigation. We’re now continuing our enforcement action against other care homes, and expect all homes to review their practices to make sure they aren’t breaking consumer law. We will act if we find evidence that they are.”

 

The CMA’s ongoing consumer law investigation into fees charged by a number of care home providers has already led to one of the UK’s leading care home providers – Maria Mallaband – dropping a contract term requiring the payment of one month’s fees following the death of a resident.

It follows a year-long study of the residential care home market, which made several recommendations to help prospective residents and their families better understand the options available to them, and ensure residents receive more effective consumer protection.

As part of this, the CMA is working on new guidance about the practice of charging families after a resident has died, and the standards of behaviour they should be meeting to comply with consumer law.

This entry was posted in Healthcare. Bookmark the permalink.

Comments are closed.