CMA issues guidance to childcare providers

27 Aug 2020
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The Competition & Markets Authority has issued an open letter and detailed guidance to childcare providers regarding unfair practices during the coronavirus pandemic.  The guidance highlights a number of areas where some childcare providers have not acted in accordance with consumer rights legislation and urges the sector to review the agreements they have with their customers.

Providers requiring full or excessively large fees for services which are not being carried out due to the pandemic public health restrictions and government guidance

The guidance highlights that it would be unfair to impose charges for services which cannot be provided, and that customers should be offered refunds where they have paid in advance for services which cannot be provided.  However, it does consider that requiring a small contribution from customers to cover unavoidable costs would be acceptable.

Providers relying on unfair cancellation terms, such as requiring unreasonable notice to be given, or high cancellation fees in cases where the business is unable to provide the service

The guidance points out that it would be unreasonable to ask customers to pay large cancellation fees when the reason for cancelling the contract is because the service is no longer being provided, and a reduction should be made to the fees to reflect lower business costs.  Where a service is still being offered, the guidance states that the notice period should be no longer than reasonable for a replacement child to be found.

Providers putting unfair pressure on consumers to agree to make payments by threatening that the child’s place will be lost or the provider will go out of business

The guidance makes it clear that using these sort of threats as leverage to force customers continue to pay for services not actually being provided in order to preserve their child’s space would be unlawful.

If you have been a victim of such unfair practices, you should notify the Competition & Markets Authority. You can also find more information and resources from Trading Standards.

If you need any advice regarding benefit entitlements or help dealing with debts, Warrington Housing Association offers a free Money Advice service for its residents. Please feel free to get in touch.


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