Sunrise to pay £2m in compensation to residents
The Competition & Markets Authority (CMA) has secured more than £2m in compensation for residents of care home operator Sunrise Senior Living as part of an investigation into compulsory ‘upfront fees’.
Sunrise has said it will give money back to the vast majority of residents who paid such fees since 1 October 2015. 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 dies within this time, 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 pay-outs 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, said care home residents shouldn’t be required to pay out thousands of pounds without being clear what they’re getting for their money.
“The CMA welcomes Sunrise’s constructive engagement and co-operation throughout our investigation,” said Mr Lusty.
“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.”
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.
It follows a year-long study of the residential care home market, which made several recommendations to help prospective residents and their families better understand the options available to them, and ensure residents receive more effective consumer protection.
As part of this, the CMA is working on new guidance about the practice of charging families after a resident has died, and the standards of behaviour care homes should meet to comply with consumer law.
Sunrise Senior Living’s UK chief executive Dr Natalie-Jane Macdonald said Sunrise had been working closely with the CMA to review the way the company organised its charges, as part of the CMA’s wider investigation into the UK care sector.
“We are pleased that the CMA has recognised our constructive engagement and co-operation with this process from day one,” said Dr Macdonald.
“We previously charged an upfront Community Fee, which helped maintain the outstanding facilities and communal areas that our residents expect and enjoy. However, we have agreed with the CMA that residents who stayed with us for shorter than average periods were not able to enjoy as much of the benefit of our facilities as residents who are with us for a longer time, which is why we are voluntarily embarking on this reimbursement programme.
“The Care Quality Commission has recognised us as one of the best care providers in the UK. We are deeply proud of the care we provide and will continue to strive to deliver the best possible experience for everyone who makes their home with us.”