Childcare providers are to be investigated if they have unfairly charged parents for services they have not been able to access due to lockdown.
The coronavirus taskforce of the Competition and Markets Authority is to investigate nurseries and other childcare providers over the way they have handled cancellations and refunds during the pandemic amid concerns that parents are being asked to pay for childcare they cannot access due to lockdown.
The CMA says complaints in relation to cancellations and refunds account for four out of five complaints being received by its coronavirus taskforce. The majority of the complaints relate to three sectors, one being nurseries and childcare providers. Many parents have complained that 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, are also reported to be charging a retainer fee.
The CMA will tackle these three sectors 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.
If companies are failing to comply with the law, it pledges to 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.
The CMA adds that, for most consumer contracts, it 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.