Summary: Mrs D complains the Care Provider failed to return a deposit paid for residential care and only provided two weeks’ notice for Mrs D to leave. The Care Provider is at fault for failing to return deposit money and for failing to give enough notice when asking Mrs D to leave. To remedy the complaint the Care Provider should return the deposit money and apologise to the complainant.

The complaint

1. The complainant who I refer to as Ms C complains on behalf of her mother who I call Mrs D. Ms C complains, Aspire Home Carers Limited, the “Care Provider” failed to return Mrs D’s deposit money of £4364.44 and only provided two weeks’ notice for Mrs D to leave.
2. Ms C says because of the Care Provider’s failures Mrs D had financial loss, and the lack of proper notice for Mrs D to leave caused both her and Ms C stress and anxiety.

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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. If they have caused a significant injustice or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 34B, 34C and 34H(3 and 4) as amended)
4. If we are satisfied with an organisation’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)

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How I considered this complaint

5. I have spoken to Ms C and considered information she has provided including her complaint and a signed contract. I spoke with the Care Provider who referred me to Insolvency Practitioners (IP). I also considered:-
• Competition & Markets Authority guidance “UK care home providers for older people – advice on consumer law”,
• The Care Provider’s contract with Mrs D.
6. The Care Quality Commission (CQC) is the statutory regulator of care services. It keeps a register of care providers who show they meet the fundamental standards of care, inspects care services and issues reports on its findings. It also has power to enforce against breaches of fundamental care standards and prosecute offences.
7. I have used the fundamental standards as a benchmark for considering this complaint.
8. Ms C and the Insolvency Practitioners had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Background information

9. In 2020 Mrs D moved into Pelham Care Home owned by Seacole’s Ltd. Mrs D signed a contract with Seacole’s Ltd. In July 2022 the Care Provider took over Seacole’s Ltd. Mrs D did not have a contract with the Care Provider but the ownership of both companies appears to be the same.

What should have happened

10. The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 set out the fundamental standards those registered to provide care services must achieve. The Care Quality Commission (CQC) has issued guidance on how to meet the fundamental standards below which care must never fall.
11. Regulation 5 says people who have director level responsibility for the quality and safety of care, and for meeting the fundamental standards are fit and proper to carry out this important role.
12. Care Quality Commission (Registration) Regulations 2009: Regulation 19 – care providers must make written information available about any fees, contracts and terms and conditions, where people are paying either in full or in part for the cost of their care, treatment and support.
13. Mrs D’s contract says,
14. “2.2 **Security Deposit – Before moving into the Home, the Resident or their Guardian is responsible for depositing one month’s fees (£4364.44) as a Security Deposit with the business, Seacole’s Limited. This Security Deposit is security that the Resident will comply with all the terms of this Contract. This Security Deposit may not be used to pay the last month’s fees without the Manager’s prior written consent.
15. If the Resident or their Guardian breaks or otherwise violates this Agreement, the business may be able to keep all or part of the Security Deposit to cover unpaid fees and/or damage to the property”.
16. “5.1 The Agreement may be terminated by either party giving four weeks’ written notice to the other party.”
17. “The agreement will also end upon the Home being closed or its contract with REDACTED County Council ending or its registration with the national care homes regulator i.e. the Care Quality Commission being cancelled.”
18. Competition & Markets Authority guidance, “UK care home providers for older people – advice on consumer law” says,
19. “3.18(g)Information about any other material upfront payments required, such as:
20. Where applicable, the amount of any deposit that you require:

1. Where you require a security deposit, you should also provide: an explanation of the purpose of the deposit and the risk that it is intended to protect you against; details of how your protect it against the risk of insolvency (for example, whether it is ‘ring-fenced’ in a separate trust account or protected by insurance); details of where and by whom the deposit will be held; and how the deposit will be refunded when the resident leaves or dies”

What happened

21. In May 2023 the Care Provider gave Mrs D two weeks’ notice to find alternative accommodation as it was closing down. Despite frequent requests the Care Provider did not return Mrs D’s deposit.
22. Ms C complained to us. During the intervening period the Care Provider went into liquidation and IPs are involved in dealing with the liquidation.

Is there fault causing injustice?

23. The Care Provider failed to return Mrs D’s deposit. This is fault and not in line with its contract or CMA guidance. The Care Provider should have a deposit protection scheme to safeguard deposits from the risk of companies going into liquidation. I have seen no evidence to suggest the Care Provider had such a safeguard and this is fault.
24. I do not know the circumstances of the home closure. I have however seen no evidence to suggest the Care Provider had to close because of either the lack of a Council contract or CQC removing registration. The failure to provide four weeks’ notice is not in line with the contract or CMA guidance and is fault.
25. Because of these faults, Mrs D has had financial loss of over £4000 and both Mrs D and Ms C had the stress of finding alternative care in a short period. They also had time, trouble, and frustration of having to pursue the return of the deposit.
26. Ms C is concerned the owner of the company can open a new care home and other people may be at risk of losing their deposit in similar circumstances. While I understand Ms C’s frustration, I cannot comment on what might happen in the future, and I cannot say the owner has not acted in good faith. This is a matter for CQC who must consider the suitability of directors when registering new care homes.

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Recommended action

27. I consider there has been fault in the actions of the Care Provider which has caused Mrs D and Ms C injustice. I consider the following actions are appropriate to remedy the complaint:-
28. Within one month of the final decision to:
1. apologise to Mrs D and Ms C for the failure to safeguard Mrs D’s deposit money and for the distress caused by the short notice period;
2. return Mrs D’s deposit money.
29. I would usually recommend service improvements in complaints such as these but as the company has gone into liquidation I cannot in this complaint. I can also take no further action to ensure the recommendations are fulfilled. This will now be a matter for the IPs.

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Final decision

30. I consider there was fault by the Care Provider which caused Mrs D and Ms C injustice. I consider the recommended actions are suitable to remedy the complaint. I have completed my investigation and closed the complaint on this basis.
31. Under our information sharing agreement, we will share this decision with the Care Quality Commission (CQC).

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman