Care homes told to act now

27 November 2018

Care home providers should not delay in reviewing their
operating systems and processes and terms and conditions of contract. It
is likely that enforcement action will be swift and determined and will
inevitably have a detrimental effect on businesses.

Comprehensive advice and guidance has been issued by the Competition
and Market Authority (CMA) in the latest round of its initiative to
review the care sector and as part of its drive toward reform of
practices heralded as unfair.


An investigation was opened by the CMA in June 2017 amid concerns
that some of the contract terms and/or practices of a number of care
operators may breach consumer law. The initial focus was on self-funding
residents and the issues of large upfront fees and the fees charged
after a resident’s death.


Following a market study and two consultations on draft consumer
advice in January and May 2018, the CMA has written to care home
providers to remind them of the obligations imposed upon them by
consumer law and to advise them that they should review their practices.


The open letter which was published on the website on 16 November 2018 recommends that the care home provider should

(a) Immediately read the advice.

(b) Carefully consider
whether changes need to be made to contracts and business practices to
make sure the provider is complying with the law (which may involve
reviewing whether all charges are fair).

© Consider a wider review of internal procedures to support compliance with the law.

[Examples provided suggest making sure
that important information is clearly, accurately and prominently
provided to prospective residents and kept up-to-date (including on
websites, in written materials such as information packs and user
guides, and in response to telephone enquiries), and that fair
complaints-handling procedures are being followed].

(d) Make sure that all
customer-facing staff understand these requirements and comply with
them, since the care home provider will be responsible for their


It is clearly stated that care home providers that don’t meet their
obligations under consumer law risk facing enforcement action by the CMA
or Trading Standards Services.


The detail of the advice and guidance is contained in ‘UK care home providers for older people – advice on consumer law’ and
in short guides published on 16 November 2018 for care homes and
residents and their families. It applies to all care homes including
independent homes – regardless of whether they are run on a voluntary or
charitable ‘not-for-profit’ basis or a ‘for-profit’ basis – and local
authority operated homes.

Transparency, Quality and Fairness

It covers:

  • Upfront information – what information should
    be provided by providers to prospective residents and their
    representatives, and when and how it should do so. This includes giving
    an indication of the weekly fees charged to self-funders and
    highlighting any especially important or surprising terms and conditions
    that will apply (such as any requirement for residents to prove they
    can pay for their own care for a minimum period of time)
  • Treating residents fairly – what should be done to
    ensure that contract terms and the way residents and their
    representatives are treated are fair under consumer law. Examples of
    unfair contract terms include requiring someone to act as a guarantor,
    without providing the prospective resident and guarantor with clear and
    transparent details, upfront, of the extent of their potential liability
    if the resident defaults.
  • Quality of service – how to comply with obligations to perform services to residents with reasonable care and skill.
  • Complaints handling – what should be done to ensure
    that complaints handling procedures are easy to find, easy to use and
    fair. Open reporting of complaints is encouraged as is cascading of
    learning from them to develop improvements.

Monitoring and Review

In addition to ongoing monitoring there will be a formal review of
the level of compliance from November 2019. Action will be taken to hold
care homes to account where appropriate. This could include civil
action or a criminal prosecution

Published by Residential Forum

The Residential Forum is to promote the achievement of high standards of care and support for children and adults living in residential care and nursing homes, supported housing, residential schools and colleges, hospices and hostels. It contributes to improving the quality of service to the public. Members of the Forum are people of standing and experience drawn from the public, private and voluntary sectors, as well as some who can speak for service users and carers.

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