Care homes firm to pay back 'upfront fees' to residents

Stephanie Hawthorne
9 May 2018
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The Competition and Markets Authority (CMA) has secured more than £2 million in compensation for residents of a major care homes group who have been charged several thousands of pounds per person in compulsory ‘upfront fees’.

The vast majority of residents who paid such fees since 1 October 2015 will get the money back from Sunrise Senior Living Ltd (Sunrise). This will apply to residents who have left or leave within two years of moving in to one of the company’s care homes. If the resident has died, their family will receive the compensation.

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 payouts of £3,000 on average, 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, says: “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.

“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.”

Sunrise has already started the process of contacting individuals (or their families) who are eligible for an offer of redress. If you believe that you or your family member is eligible and have not been contacted, you can contact Sunrise at EnquiriesCF@sunriseseniorliving.com.

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.

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