Owner of Norwich care home to face competitions regulator in court
PUBLISHED: 16:58 07 February 2019 | UPDATED: 16:58 07 February 2019
The company behind a Norwich care home is being taken to court after it refused to refund residents a compulsory administration fee.
Care UK is one of the UK’s largest care home providers and owns Cavell Court in Cringleford.
But last December the Competition and Markets Authority (CMA) told Care UK it must refund more than 1,600 residents who were charged a compulsory upfront administration fee of as much as £3,000 or else face legal action.
It is not known whether any of the residents were at the Norwich home, but the CMA alleges the care home provider was breaking consumer protection law by requiring a substantial non-refundable administration fee from residents for which they received no services or products in return.
It also believes that the company’s description of the charge, and what it was for, was misleading and that residents were told about the fee too late in the admission process.
However Care UK spokesman said: “We do not believe there is any evidence whatsoever to suggest residents have been disadvantaged or that our historic fee structures were in breach of consumer law.”
Care UK did stop charging the fees after the CMA got involved, but has not agreed to refund the residents, leading to court proceedings.
The CMA will argue that in charging these administration fees, Care UK used contract terms and practices that were unfair and contrary to consumer protection law.
The Care UK spokesman added: “The CMA is simply wrong to suggest residents who paid a one-off admission or administration fee, covering genuine and essential activities undertaken once, before admission, should be wholly or partially refunded.
“Without the previous one-off fee, weekly fees would have been commensurately higher, so no loss has been suffered.”
The CMA said its consumer law investigation into care homes has already led to residents receiving £2m in compensation from one of the UK’s major care home providers for paying upfront compulsory fees and Care UK reducing the length of time for which it charges fees after a resident’s death.