A High Court trial against the one of the UK’s largest care home providers has launched today, following its use of high upfront administration charges.
The Competition and Markets Authority has told Care UK it must refund 1,600 residents who were charged compulsory fees of as much as £3,000.
The CMA brought the case against the care provider in 2019, arguing that the charges broke consumer protection law, as the business offered no services or products in return.
The authority also said the company misled residents in its description of the charge and said it was introduced too late in the administration process.
Following the CMA, intervention Care UK has since axed the fees. The court proceedings seek to secure refunds for residents and CMA will also argue that Care UK must be prevented from charges in the future.
A spokeswoman for Care UK said: “We strongly refute all the assertions made by the CMA and always acted in compliance with the CMA’s guidance and any other guidance available. The practice of charging of an administration fee was widespread across the care home sector and there was no guidance in place regarding these fees at the time of the CMA market study up to 2018.
“Care UK has always led the way in providing a clear outline of fees on its website and throughout the admission process to potential residents and their families. As a result, the allegations made by the CMA are not a fair and true reflection of our approach to residents and their care.
“We remain fully compliant with the guidelines, are engaging fully with the court proceedings and look forward to concluding the legal action.”
Care UK has 121 care homes providing over 8,000 beds, according to company filings reported in October 2020. It is one of the largest operators of care homes for older people in the UK.
The trial commences on 11 May and is due to finish on 18 May.
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