Consumer rights body to investigate childcare providers over refund policies

The Competition and Markets Authority is to investigate childcare providers and others over concerns around charging for childcare when parents are unable to access it during lockdown.

Childcare

 

The Competition and Markets Authority is to investigate cancellations and refunds in organisations including nurseries and childcare providers amid concerns that parents are being asked to pay for childcare they are not receiving due to lockdown.

The CMA says it has seen increasing numbers of complaints in relation to cancellations and refunds, with these now accounting for four out of five complaints being received into its coronavirus taskforce. The majority of the complaints relate to three sectors, one being nurseries and childcare providers.

workingmums.co.uk has received a number of complaints from parents who say they are being charged for childcare even though nurseries and childminders are closed to all but key worker and vulnerable children. Some key workers whose childcare provider has closed, meaning they have to move to alternative providers, have also reported that they are being charging a retainer fee.

The CMA will tackle these three areas as a priority and then move on to examine other sectors, based on the information received by the taskforce.

The CMA says it acknowledges that most businesses are acting reasonably in what are unprecedented circumstances and that the current crisis is placing everyone under pressure, but it adds that consumer rights cannot be ignored.

It states: “If it finds evidence that companies are failing to comply with the law, the CMA will take appropriate enforcement action, including moving quickly to court if a firm does not address its concerns. Individuals can also take their own legal action against unfair terms should they choose to.”

It adds that, for most consumer contracts, the CMA would expect a full refund to be issued where:

– a business has cancelled a contract without providing any of the promised goods or services
– no service is provided by a business, for example, because this is prevented by the restrictions that apply during the current lockdown
– a consumer cancels or is prevented from receiving the service, for example, due to the restrictions that apply during the current lockdown

It also advises that businesses should not be profiting by ‘double recovering’ their money from the Government and customers.

If people have been affected by unfair cancellation terms in wake of Covid-19, they can report them to the CMA using the online form.

Neil Leitch, chief executive of the Early Years Alliance which represents childcare providers, said: “The government has asked that childcare providers are ‘reasonable and balanced in their dealings with parents’ during the coronavirus outbreak, and we are proud to see that this has been the approach taken by the vast majority of nurseries, pre-schools and childminders to date. We know that many early years providers are waiving parent fees during this crisis regardless of the terms of their parental contracts, and despite the negative financial impact this is likely to have on their settings.

“Any instances of settings taking an unreasonable approach to parental fees would be likely to represent a tiny minority of the sector as a whole. What’s more, it is important that the CMA takes into account the fact that, unlike the holiday and wedding industries, the childcare sector is heavily dependent on government funding, and this funding has been inadequate for years. This has put a huge pressure on providers trying to remain sustainable, and especially during this incredibly challenging period.”



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