Care Homes – CMA Consumer Study Update

It is just over one year since the Competition and Markets Authority (“CMA”), the UK competition regulator, published new guidance for health and social care providers with service users aged 65 years or over on how to comply with their obligations under consumer law.

The Guidance was published in November 2018 after a wide-ranging market investigation into the care home sector, during which the CMA identified a number of concerns, particularly in relation to residents’ agreements and fees being charged for older people.

Over a year on since the Guidance was published, providers should by now have had plenty of time to read and get familiar with it, and implement any necessary changes to existing contractual arrangements and practices.

The CMA have remained active in the sector since the Guidance was published and the market investigation is ongoing. They have approved voluntary undertakings from three major providers by way of redress for potential breach of consumer law and have since issued legal proceedings against one major provider, and threatened proceedings against another, for refusing to reimburse past fees charged.

The CMA are due to review compliance with the new guidance over the coming months so further enforcement activity might be in the pipeline.

Providers cannot assume that the CMA, or their consumer law obligations, will go away. Breaches of consumer law can give rise to regulatory fines, claims for damages and/or unenforceable agreements, none of which are desirable from a provider’s perspective.

If they have not already done so, providers should review existing agreements and ensure that they do not fall foul of consumer law.  If providers of services to people aged 65 or over need to remind themselves of what the CMA expects from them from a consumer law perspective, the Guidance is available in full via the CMA website, at this link.

For further information or advice on the CMA investigation, or other matters affecting care providers, please contact Ridouts on 0207 317 0340.