Posted by James Sage, Partner
Crack-down on service user contracts?
The CMA (formerly the Office of Fair Trading) recently announced its intention to carry out a 12 month market study into care homes across the UK.
Of particular interest is the CMA’s focus on residents’ contracts and whether they comply with consumer protection legislation. Interim results will be published in June 2017 and we expect there to be a crack-down on unfair practices including lack of transparency on charges, unequal termination rights and fee rises at short notice. Consumer legislation applies equally to homecare and the same principles will apply.
Loans to residents
We have been increasingly asked by care home providers whether they can allow residents to delay payment of fees until their property is sold – in the meantime taking a charge over their property. In most circumstances, this will fall under the ambit of consumer credit legislation and needs to be approached with caution in order to avoid fines and having to register with the Financial Services Authority. If this is the outcome, the resident will also have to agree to sign a fully compliant consumer credit agreement. There are exemptions which apply in certain circumstances and we can advise you further if needed.
If you would like your service user contract reviewed free of charge to ensure it is watertight and complies with consumer legislation, please get in touch with James Sage using the contact details below.
Read more articles in this month’s social bulletin:
– CQC’s next phase of regulation
– Fees & funding in the care sector – could the crisis be averted?
– Does self-employed status pose a risk to social care providers?
Contact James Sage on:
01225 730231 Email us
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