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CMA is investigating childcare cancellation policies

By Rachel Lawlerchildren playing nurseries

The Competition and Markets Authority (CMA) is investigating reports of businesses “failing to respect cancellation rights” in the coronavirus pandemic.

The CMA says that its Covid-19 Taskforce has received a huge number of complaints about businesses refusing refunds, with childcare providers listed as a sector of “particular concern”.

Other sectors targeted by the investigation include weddings and private events and holiday accommodation.

No service provided
The authority said that it expects refunds to be issued when “no service is provided by a business, for example because this is prevented by the restrictions that apply during the current lockdown”.

The CMA also warned that businesses should not be “double recovering” by claiming government support while still charging customers.

Consumer rights
Andrea Coscelli, CEO of the CMA, commented: “The current situation is throwing up challenges for everyone, including businesses, but that does not mean that consumer rights can fall by the wayside. If we find evidence that businesses are failing to comply with consumer protection law then we will get tough – that means launching enforcement cases and moving to court action where there is a strong reason to do so.”

Funding concerns
Neil Leitch, chief executive of the Alliance, said: “The government has asked that childcare providers are 'reasonable and balanced in their dealings with parents' during the coronavirus outbreak, and we are proud to see that this has been the approach taken by the vast majority of nurseries, pre-schools and childminders to date. We know that many early years providers are waiving parent fees during this crisis regardless of the terms of their parental contracts, and despite the negative financial impact this is likely to have on their settings.

“Any instances of settings taking an unreasonable approach to parental fees would be likely to represent a tiny minority of the sector as a whole. What's more, it is important that the CMA takes into account the fact that, unlike the holiday and wedding industries, the childcare sector is heavily dependent on government funding, and this funding has been inadequate for years. This has put a huge pressure on providers trying to remain sustainable, and especially during this incredibly challenging period.

“It is vital that any review of childcare practices takes these factors into consideration, and the Alliance would be very happy to support the CMA to gain a full and comprehensive understanding of these issues to ensure that the upcoming investigation is balanced and well-informed.”

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