Sunrise Senior Living is to pay more than £2m in compensation to former residents unfairly charged upfront fees, the Competition and Markets Authority (CMA) has said.
The care home operator, which is facing individual pay-outs averaging £3,000, will refund residents who have paid the fees since 1 October 2015.
Dr Natalie-Jane Macdonald (pictured), Sunrise Senior Living chief executive, said the company made the move voluntarily. The operator has started the process of contacting individuals who are eligible for compensation.
Residents who have left or leave within two years of moving into one of the company’s homes are eligible for compensation, with refunds going to the families of residents who pass away within the period.
As part of its ongoing consumer law investigation into care home charges by UK providers, the CMA said Sunrise had been ‘unclear’ about how its upfront fees, running to several thousands of pounds per person, would be used.
The watchdog criticised the provider’s policy that upfront fees were non-refundable once somebody has lived in one of its homes for more than 30 days. Its investigation also found that residents were forced to pay before securing a care home place.
Commenting on the CMA’s findings Macdonald said: ‘We have been working closely with the CMA to review the way we organise our charges, as part of their wider investigation into the UK care sector.
‘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,’ she said.
The CMA’s senior director for consumer protection, George Lusty, said it was ‘only right’ Sunrise care home residents who have paid upfront fees receive compensation.
‘Care home residents shouldn’t be required to pay out thousands of pounds without being clear what they’re getting for their money,’ he said.
‘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.’
Sunrise has also committed to new guidance, soon to be published by the CMA, relating to death-fee policies in care homes. Following an inquiry into care homes at the end of last year, the watchdog found that some operators were still charging relatives up to a month after the death of a resident.