An investigation from the Competition and Markets Authority (CMA) has revealed that care homes have been taking payments from families for ‘extended periods’ after a resident has died, as well as charging high upfront fees.
The probe also shows that people find choosing between care homes very confusing and there was a lack of transparency on how the funding system works.
“Some of the most vulnerable people in our society use care homes, often moving to them under extremely difficult circumstances,” says Andrea Coscelli, acting chief executive of the CMA.
“It’s therefore essential they are able to make informed choices, understand how services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have any concerns.”
As a result of the concerns over unfair charges the CMA has now opened a consumer protection case to investigate further.
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Rip-offs and confusion
As well as charging huge up-front fees, and continuing to charge long after a resident has died, care homes also lack transparency when it comes to their charging structures and the small print in contracts.
The CMA has highlighted a concern over the fact that many care homes have contracts that allow them to evict residents at very short notice.
“Older people and their families are suffering unnecessary distress and financial pressure due to gaps in consumer protection in the care home market,” says Gillian Guy, chief executive at Citizens Advice.
“The CMA is right to look at consumer protection and should seek to strengthen these where existing rules are not providing the right cover, including the notice period for fee increases and protections for people’s deposits.”
Concerns for the future
The CMA has also raised concerns that care homes are making little investment for the future, despite the fact the number of people aged over 85 is projected to more than double by 2040.
“Demand for care home places is expected to surge over the next two decades. To make sure the additional capacity this requires is available, it needs to be built in good time,” says Coscelli.
“At present, short term funding pressures and uncertainty mean that the sector is not attracting investment. We will be focussing on finding ways to deal with these, and other concerns identified.”
Because of the CMA’s initial findings, it is working on ways to help care home residents and their families. It has pledged to examine how people can be better supported when choosing a care home.
The investigation will also look at improving the complaints process and how to encourage investment for the future.
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