Competition & Markets Authority Review of COVID-19, Consumer Contracts, Cancellations & Refunds

Competition & Markets Authority Review of COVID-19, Consumer Contracts, Cancellations & Refunds

The Competition & Markets Authority (CMA) has announced that it is investigating businesses failing to respect cancellation rights within contracts during COVID-19. This follows a number of reports of poor business practices in which commercial companies across a range of sectors have delayed or failed to provide refunds requested by consumers and despite contractual requirements to do so.  The CMA’s review is understood to include weddings and private events, hotel accommodation and nurseries and childcare providers, and has made reference to “nurseries asking people to pay very high sums in order to keep a place open for their child”.

The majority of childminding settings in Scotland are closed at this time unless supporting the national response to COVID-19 by providing critical childcare to key workers’ families and vulnerable children.

SCMA recognised early on the exceptional circumstances experienced during the COVID-19 outbreak, that pre-existing childminder contracts would be unlikely to cover either COVID-19 nor extended shutdown and also that both childminders and parents may be experiencing different degrees of loss of income. As such, we have been advising a reasonable and pragmatic approach based on both members’ and parents’ individual financial circumstances and mutual agreement. See SCMA Statement on Childminding Fees.

We believe that most members may not be following normal contracts at this time and adopting more of an informal COVID-19 approach or policy, taking into account where we all find ourselves. We are aware that some parents continue to pay retainer fees voluntarily and of other cases in which parents have cancelled their pre-existing contracts until after lockdown.

We continue to encourage a reasonable, voluntary approach between childminder and parents/carers based upon mutual agreement and which reflects individual financial circumstances.

We do not believe it would be advisable to refuse a request for a refund if payment has been required through a contract, particularly as childminders may be hoping that families will continue to use their setting once lockdown is relaxed.

SCMA will be submitting information to the CMA review to contribute to this work and to explain the approach adopted by childminding at this time.

CMA Press release: CMA to investigate cancellation policy concerns