11 February 2010
The OFT has now concluded its consideration of the Supreme Court Judgment in The Office of Fair Trading (Respondents) v Abbey National plc & Others (Appellants) [2009] UKSC 6.
The OFT remains of the view that unfair terms are in use in relation to exit fees (also known as transfer fees) in the retirement homes sector and is continuing its investigation. The OFT will write shortly to all retirement home firms with which it is engaging to respond to any outstanding points they have raised and provide an update on the investigation.
McCarthy & Stone
In September 2008 McCarthy & Stone gave an undertaking to the OFT that it would remove the transfer fee from new developments as they were set up post 1 September 2008 and would not enforce the fee in existing contracts.
The OFT has been informed by McCarthy & Stone Retirement Lifestyles Ltd that the majority of the assets and liabilities of McCarthy & Stone plc have transferred to a new company called McCarthy & Stone Retirement Lifestyles Limited and that the new company will continue to honour the undertakings given by the former McCarthy & Stone plc
The OFT would like to make it clear that these voluntary undertakings are only in relation to developments where McCarthy & Stone or McCarthy and Stone Retirement Lifestyles Limited is the landlord.
17 December 2009
The OFT is currently considering the implications of the judgment of the Supreme Court given on 25 November 2009 for consumers, other stakeholders and existing and future consumer based regulation.
The full name of the judgment is Office of Fair Trading (Respondents) v Abbey National Plc and others (Appellants) [2009] UKSC 6. It can be found on the Supreme Court website.
The OFT has issued a recent press release about the judgment.
The judgment overturned previous High Court and Court of Appeal rulings that unarranged overdraft charging terms can be assessed in full for fairness.
Currently the team is considering what effect, if any, this judgment may have on the retirement homes investigation. It hopes to conclude this early in the New Year when it will continue with any action as appropriate.
5 November 2009
Following the OFT's notices to firms some firms have indicated that they now would like to talk to the OFT about giving 'undertakings' under Part 8 of the Enterprise Act. [see note 1]
The OFT has proposed that appropriate undertakings would be for firms to commit to:
Given that there are a number of firms involved in this investigation, in the interests of fairness and consistency the OFT has proposed a draft set of standard undertakings to all firms and, because of the significant interest from consumers in this investigation, has today published the draft.
The OFT has set a deadline of 14 days for comment on the draft undertakings. Comments from interested third parties are also welcome.
After this time and considering all comments received, the OFT may reissue the undertakings inviting all the firms originally approached by the OFT to sign them.
If firms sign the undertakings they are legally bound to stop enforcing or relying on exit fee terms from the date of signing.
1. Under Part 8 of the Enterprise Act, before taking enforcement action against a firm that it considers is infringing its legal obligations to consumers, the OFT must consult with the firm with a view to getting the infringement stopped without the need to go to court and/or preventing future infringements.
As part of the consultation process where appropriate the OFT may decide to accept undertakings from the firm that it will stop the infringing conduct. The OFT may propose for consultation what it considers to be suitable undertakings.
After two weeks' consultation, if the firm cannot satisfy the OFT through giving undertakings or otherwise, the OFT can apply to the High Court or County Court (or Court of Session or Sheriff in Scotland) for an enforcement order that the infringing conduct be stopped.
3 September 2009
The OFT has today announced an investigation into the contracts signed by occupants of purpose built owner occupied retirement homes. The OFT considers that a number of terms on exit fees in these contracts may be unfair and so may breach the Unfair Terms in Consumer Contracts Regulations (UTCCRs).
The OFT is issuing formal written notices to 26 retirement home firms setting out its concerns over terms on exit fees charged when residents sell or rent their properties.
No assumption should be made that any individual company has been found to have breached consumer protection legislation at this time.
See press release and Q&As.
The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers can seek advice from Consumer Direct (tel: 08454 04 05 06, www.consumerdirect.gov.uk) or obtain independent legal advice.
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