Posted by Zoe Pettigrew, Solicitor
Tough new powers for the Competition and Markets Authority – how this affects your business
The government has announced today that, under new powers proposed to be given to the Competitions and Markets Authority (CMA), businesses in breach of consumer law could be directly fined by the CMA without them having to go through the courts.
The CMA issued its final guidance on care contracts and consumer law obligations for care home providers in November last year. Since then, CMA has taken legal action against care providers, for example, Care UK in respect of breaching consumer law.
However, these new powers would enable the CMA to directly intervene much earlier with businesses that are breaching consumer law and to directly impose fines.
What are the government’s plans?
Theresa May has said that “The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules. It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA…”
The government is taking this very seriously and follows on from the government’s response to the Super Complaint in respect of consumer law – brought by Citizens Advice – as well as the areas where the CMA has acted recently, including in respect of unfair charges in care contracts.
Kelly Tohurst (Consumer Minister) is holding a Consumer Forum today to bring together a cross-section of different sector’s regulators in respect of this.
The government’s upcoming Consumer White Paper will consult on these new powers and so we shall await the publication of this to find out how exactly the CMA will be able to take action.
What does this mean for me and my business?
The government is taking a strong position on this and is bringing into focus consumer rights across all sectors. It is clearly looking to extend the powers that the CMA has further than ever before, to enable it to take direct action against businesses including care homes.
The CMA has previously stated that they would be carrying out a market review of compliance with its care home guidance towards the end of this year (November 2019). Now is the time to review your admissions processes, marketing materials and service user contracts to ensure that you are consumer law compliant and to avoid potential fines and legal action.
We are here to help you
These new powers for the CMA are being consulted on, however the consumer law and guidance from the CMA is already in place.
We would encourage all providers to review their service user contracts, admissions and complaints documents to ensure that they are compliant with consumer law.
If you would like advice and assistance on ensuring your admissions and complaints processes and service user contracts are compliant with consumer legislation, please get in touch. We have developed model documentation which complies with the CMA guidance whilst protecting your business.
If you are already facing compliance action by the CMA, demands for refunds from service users or relatives, or criticism by CQC, our healthcare dispute resolution team can help. We are experts in contentious matters relating to care contracts. We can help to limit the damage and preserve your reputation.
Whether you have had contact from the CMA or not, this is an issue that providers can no longer afford to ignore.
If you have any enquiries, please contact Hazel Phillips or Zoe Pettigrew on:
0800 923 2075 Email us
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