The CMA has secured more than £2m in compensation for Sunrise Senior Living residents as part of an investigation into compulsory ‘upfront fees’.
Sunrise has agreed to refund money back to the vast majority of residents who have paid upfront fees since 1 October 2015.
The payments apply to residents who have left or leave within two years of moving into a Sunrise home.
In the event the resident dies within this time, compensation will be paid to their family.
The development is part of the CMA’s ongoing investigation into how care homes charge for their services.
The investigation found that Sunrise’s description of its upfront fee, which runs into several thousands of pounds per person, and how it was used, was unclear.
Prospective residents were also having to pay out before securing a place at a home.
The CMA also raised concerns that the fee was non-refundable once someone had lived in the home for more than 30 days.
Sunrise is providing individual pay-outs averaging £3,000 and has given legally binding commitments to end charging future residents up-front fees.
The provider has also agreed to abide by CMA guidance on ‘after-death’ fees, which is soon to be published.
Maria Mallaband announced earlier this year, that it was ending after-death fees (see Maria Mallaband drops ‘after death’ fees following CMA action).
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. So, it’s only right that residents at Sunrise care homes will now receive compensation if they’ve paid these fees, and that future residents won’t have to make such payments at all.
“The CMA welcomes Sunrise’s constructive engagement and co-operation throughout our investigation. 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.”
Dr Natalie-Jane Macdonald, UK CEO of Sunrise Senior Living, said: “We have been working closely with the Competition and Markets Authority to review the way we organise our charges, as part of their 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.
“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.”