Leading care home operator Barchester Healthcare is facing a potential £12m fee refund bill as part of a competition watchdog investigation.
Barchester’s latest accounts said it may have to refund up to £12m if action by the Competition and Markets Authority (CMA) is successful.
The news came after the CMA issued Barchester with a letter before action in relation to administration fees and after death charges earlier this year (see Barchester issued with letter before action over admin and after death fees).
The CMA’s action was part of its probe into potential care home breaches of consumer law for which it was handed new powers to fine by the government in June.
In its annual report for the year to 31 December 2018, which was published this month, Barchester said: “In the event that the CMA commences proceedings and is successful the financial impact would be in the range of £nil to £12 million.
“The Directors, having taken advice from specialist Leading Counsel, believe that the Company is in a strong position to refute the case from the CMA and accordingly no provision has been made in the statutory accounts.”
In a statement released earlier this year, Barchester said it no longer charged upfront fees to prospective residents as of 14 January 2019 while it continued to charge a fully transparent, fully refundable deposit to secure a care home place.
While acknowledging Barchester’s updating of its policies, the CMA said Barchester had not taken satisfactory action to compensate residents who had been charged the fee.