Summary: Mrs X complained the care home, Croft Residential Ltd unfairly terminated her husband, Mr Y’s respite placement after just one day. She also complained it failed to refund a £1828.57 reservation deposit she paid prior to Mr Y moving into the care home. The care home was at fault. It did not follow guidance when it terminated Mr Y’s contract and refused to refund his reservation deposit. We recommend the care home refund Mrs X the reservation deposit and pay her a £150 symbolic payment to recognise the distress caused to her and Mr Y. The care home should review how it handles contract terminations and reservation deposits to ensure it does so in line with the published guidance.

The complaint

1. Mrs X complained Croft Residential care home (the care home) unfairly terminated her husband, Mr Y’s, respite care placement after just one day because it could not meet his needs. Mrs X further complained she paid the care home an upfront reservation fee of £1828.57 but it has only refunded 50% of the fee.
2. Mrs X said the care home’s decision to terminate Mr Y’s placement was unfair and caused her significant distress.

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The Ombudsman’s role and powers

3. We investigate complaints about adult social care providers and decide whether their actions have caused an injustice, or could have caused injustice, to the person making the complaint. I have used the term fault to describe such actions. (Local Government Act 1974, sections 34B and 34C)
4. If an adult social care provider’s actions have caused an injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))
5. We may investigate complaints from a person affected by the matter in the complaint, or from someone the person has authorised in writing to act for him or her. If the person has died or cannot authorise someone to act, we may investigate a complaint from a personal representative or from someone we consider suitable to represent the person affected. (section 26A or 34C, Local Government Act 1974)
6. If we are satisfied with a care provider’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
7. Under the information sharing agreement between the Local Government and Social Care Ombudsman and the Care Quality Commission (CQC), we will share this decision with CQC.

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How I considered this complaint

8. I spoke to Mrs X about her complaint.
9. I considered the care home’s response to my enquiry letter.
10. I considered Government guidance produced by the Competition and Markets Authority titled ‘UK care home providers for older people – advice on consumer law’.
11. Mrs X and the care home had an opportunity to comment on my draft decision. I considered comments before I made a final decision.

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What I found

Consumer law

12. Consumer law requires care homes to treat residents and their representatives fairly. Care homes must not mislead them, behave aggressively or otherwise act unfairly towards them. This obligation applies before as well as after the resident has moved in or signed a contract. It means care homes must do certain things, such as provide key information upfront, so residents and their representatives can make informed decisions.
13. Consumer law requires care homes to ensure contracts with residents are fair. Contracts must not put residents at an unfair disadvantage, by tilting the rights and responsibilities under the contract too much in the care home’s favour.

Competition and Markets Authority (CMA) guidance

14. The CMA has published guidance for care homes to help them comply with their consumer law obligations. The guidance applies specifically to care homes for people over 65 and covers the whole of the United Kingdom. The guidance states it is relevant for all care homes, irrespective of whether residents pay their own fees or are state funded.

Reservation deposits

15. Some care homes ask residents to pay a reservation deposit, or reservation fee to hold a room until the resident moves in. The CMA guidance says that where care homes require a reservation deposit it should provide an explanation of the purpose of the fee and the details of the risk the fee is intended to protect the care home against.
16. Care homes must give the prospective residents and their representatives clear, accurate and upfront information about any requirement for a deposit. The CMA guidance says that where a care home fails to do this at the earliest opportunity it is likely to infringe consumer law.
17. The CMA guidance says a reservation deposit should only legitimately be used to protect care homes against losses it might incur as a direct result of the resident not moving into the home after a contract has been agreed. Similarly, where the terms of agreement make a reservation deposit non-refundable in all circumstances it is also likely to be unfair. Such terms allow the care home to retain the deposit even where it was at fault or where its actions prevent the resident moving in as agreed.
18. The CMA guidance says care homes should ensure:
• Prospective residents and their representatives are provided with key information about any requirement for a reservation deposit on first contact.
• The terms of agreement clearly and accurately explain the circumstances in which the reservation deposit will and will not be refunded and the arrangements for refunding it. This is so residents and their representatives can easily understand and foresee how they might be affected.
• The terms of agreement should not allow care homes to benefit where it is at fault. For example, where it withdraws an offer because the resident’s care needs change before they move into the home and it can no longer meet their needs.
• Where the resident moves in, the reservation deposit is returned in full as quickly as possible or credited against the first fees to be paid.
19. The CMA guidance says it is likely to be unfair if care homes fail to refund or credit a reservation deposit towards the resident’s fees when they move in.

Termination of contracts

20. The CMA guidance states care homes should provide residents with detailed information about how they or it may terminate the contract. It says care homes should include terms in its contracts that give both it and the resident legitimate reasons for ending it.
21. The guidance states if a care home’s terms give it wide discretion to terminate a contract (for example, for any reason at all or for vaguely defined reasons), it is likely to infringe consumer law as such wording is open to misinterpretation and misuse. It says where the terms allow a care home to terminate a contract on short notice or without notice it is likely to infringe consumer law because the resident (who may be vulnerable) may not have sufficient time and opportunity to make arrangements for suitable alternative accommodation.
22. The guidance gives some specific examples of legitimate reasons for terminating a resident’s contract. This includes where the resident is violent towards staff or other residents and there is a significant risk of harm to staff, other residents, or the resident themselves if they remain in the home. It says in these circumstances the care home should contact the local authority for advice and assistance in making appropriate arrangements.
23. The guidance says even where a resident might be in serious breach of a contract, the care home should ensure they and their representative are given sufficient opportunity to address the conduct. It says care homes should not ask a resident to leave without first consulting with them and their representative, and any other relevant independent professionals, and after efforts have been made to meet the resident’s care needs.
24. The guidance says the same principles apply regardless of whether the contract is for long-term care or short-term respite care.

What happened

25. Mrs X lived with her husband, Mr Y who has dementia. She cared for him at home. In February 2020 Mrs X needed to go into hospital for a short period and therefore needed Mr Y to move into a residential care home on a short-term respite placement.
26. Mrs X chose the care home which states it is registered to care for people living with dementia. Mrs X visited the care home with Mr Y so it could carry out a pre-assessment of his needs. The assessment noted Mr Y had a diagnosis of dementia which meant he may become agitated and may venture out of his room during the night. The care home said at no time did Mrs X inform it that Mr Y had any behavioural problems.
27. Mrs X agreed for Mr Y to move into the care home at the start of March 2020, the day before her admission to hospital. The care home said Mrs X agreed to pay a reservation deposit of £1828.57 which it said was 80% of the usual weekly fee. The care home said it offers this to all interested residents as it allows people to secure the room before they are ready to move in.
28. Mrs X signed an agreement for Mr Y to move into the care home for a short-term placement. The agreement makes no reference to the reservation deposit. The agreement stated it usually gave resident’s four weeks’ notice if it was no longer able to accommodate them. It said a shorter notice period would only apply in emergency situations.
29. Mr Y moved into the care home at the start of March 2020. However, the care home said shortly after admission it became clear he was very unsettled. The care home said he tried to leave the premises several times through bedrooms of other residents and fire escapes. When Mr Y realised he could not leave, he became verbally and physically abusive towards staff. The care home decided it had no option but to call Mrs X and ask her to collect him on an emergency basis as it was unable to cope with his behaviour. Mrs X attended the care home and took Mr Y home. Mr Y had lived at the care home for less than 24 hours.
30. A few days later Mrs X complained to the care home. She said she chose the care home because it specified it cared for people with dementia. Mrs X said the matter caused her a great deal of anxiety and distress as she had to find suitable alternative care for Mr Y at short notice before she went into hospital. Mrs X questioned whether the care home had a strategy in place to deal with such situations. She was unhappy it did not give four weeks’ notice in line with the agreement. Given the circumstances, Mrs X asked the care home to refund the £1828.57 reservation deposit.
31. The care home responded to Mrs X’s complaint. It said following its initial assessment it considered the care home was suitable for Mr Y, but following admission, he became unsettled. The care home said it tried techniques to calm him down, but he became physically and verbally aggressive. The care home said it could not have foreseen this behaviour at the initial assessment. The care home said it was an emergency situation as it felt Mr Y was a risk of harm to other residents and staff. It said it would refund 50% of the reservation deposit as it had declined a number of long stay enquiries for his room between his initial assessment and his admission.
32. Mrs X was unhappy with the response. She said the offer of 50% was unacceptable given the care home states it cares for people with dementia but could not cope with Mr Y after less than 24 hours.
33. The care home responded again to Mrs X and said its offer of 50% refund was a fair outcome and it had nothing further to add.
34. Mrs X remained unhappy and complained to us.

My findings

Decision to terminate Mr Y’s placement

35. It is for a care home to decide whether it can meet a resident’s needs and whether it is safe and appropriate for a resident to continue living there. Care homes are entitled to give notice and terminate a resident’s placement, however they must do so in a way which is line with consumer law.
36. The signed agreement between Mrs X and the care home stated the care home could give a short period of notice in emergency situations. It did not give defined examples of what an emergency might be. This left this term open to misinterpretation and misuse. This is not in line with the CMA guidance which says terms such as this are likely to infringe consumer law. That is fault.
37. The care home decided it could not meet Mr Y’s needs, based on his behaviour. However, there is no evidence that it adequately consulted with Mrs X or gave her sufficient opportunity to address Mr Y’s behaviour. There is also no evidence it considered possible solutions other than to terminate the contract and no evidence that it liaised with the Council, which the guidance suggests it should do in extreme cases. Its decision to terminate the contract without adequate consultation or discussion is fault and is not in line with the CMA guidance.
38. This caused Mr Y distress when he had to move out of the care home after less than 24 hours. It also caused Mrs X significant distress because she had to source alternative care for Mr Y at very short notice before her planned hospital admission.

The reservation deposit

39. There is no evidence the care home provided Mrs X with any information about the reservation deposit. Although the care home sent Mrs X an invoice there is nothing which shows it provided her with an explanation of the purpose of the fee or the circumstances that it would or would not be refunded. Mrs X signed an agreement with the care home however there was no reference to the payment of the reservation deposit in the terms. The care home failed to provide clear, upfront information and terms about the reservation deposit. That is fault.
40. The care home told us the reservation deposit Mrs X paid was to keep a particular room available for Mr Y. The CMA guidance states care homes should only require a reservation deposit to protect it against losses it might incur as a direct result of the resident not moving in after agreeing a contract. It considers failing to refund a reservation deposit or credit a reservation deposit towards the resident’s fees when they move in is likely to be unfair. Mr Y moved into the care home as agreed and was there for less than 24 hours. The care homes refusal and failure to fully refund the reservation deposit is not in line with the CMA guidance and is fault.
41. The care home did not explain to Mrs X what the reservation deposit was for, in what circumstances it would or would not be refunded and the arrangements for refunding it. This is fault. This caused Mrs X uncertainty about what would happen with this money and if and when it would be refunded. Because it did not make this clear, it should refund this money to Mrs X.

Recommended action

42. The care home should within one month of the final decision:
• refund the £1828.57 reservation deposit Mrs X paid it prior to Mr Y moving in.
• pay Mrs X £150 to acknowledge the distress caused by the way the care homes decided to terminate Mr Y’s placement. The symbolic payment also acknowledges the distress caused to Mr Y.
43. The care home should within three months of the final decision:
• review its procedures to ensure the requirement and arrangements for a reservation deposit are clearly set out in the terms and conditions in line with the CMA guidance.
• review the termination terms on its contracts to ensure it complies with CMA guidance.
44. The care provider should provide us with evidence it has carried out these reviews.

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Final decision

45. I have completed my investigation. I found fault causing injustice and have recommended a remedy.

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Investigator's decision on behalf of the Ombudsman