The Competition and Markets Authority (CMA) has warned one of the UK’s biggest care home providers that it will pursue legal action unless it refunds fees to 1,600 residents.
Care UK charged a compulsory, up-front “administration fee” of as much as £3,000 to many residents for which they got nothing in return. The CMA is demanding that the company reimburses those affected and pays out compensation, to the total value of around £3 million.
Last month, the CMA published the findings of a long-running investigation into charging practices in the care home sector, warning of widespread abuses.
However, Care UK – which runs 110 care homes nationwide – disputes the CMA’s claim that the fees were unfair. Although they are no longer imposed on residents, the company insists that without the up-front charges, service users’ weekly bills would have been higher.
“We do not believe there is any evidence whatsoever to suggest residents have been disadvantaged or that our historic fee structures were in breach of consumer law,” the company stated.
“Our admission processes ensure prospective residents are aware of key terms in our contracts, including our fee structure, very early in their discussions with us and well before they finalise their choice of care home.”
The CMA has already forced changes to how care homes charge their residents – and imposed significant fines for malpractice. Sunrise Senior Living was hit with a £2 million penalty over its up-front “Community Fee”.
“The CMA’s decision to issue a letter before action to Care UK is a further demonstration of its determination to enforce consumer law in the care homes sector,” consumer law expert at Pinsent Masons law fim, Tim Riisager noted.
The regulator has given Care UK until January 10 2019 to respond to its warning, but the company has insisted that it will defend itself against any action taken.
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