Consumer NZ lodges complaint with fair trading watchdog over retirement villages' care claims
Wednesday, 15 September 2021
Consumer NZ has lodged a complaint with the fair trading watchdog, the Commerce Commission, asking it to investigate retirement villages’ aged care claims.
It signalled it was likely to do this just over a month ago.
A key selling point for many retirement villages was their rest home facilities if a resident could no longer live independently, Consumer NZ chief executive Jon Duffy said.
Villages’ advertising and marketing created the impression the care was guaranteed, but that was often not the case.
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Retirement village contracts reviewed by Consumer NZ found they failed to give any assurance aged care would be available when needed.
“Contracts typically state residents may be given priority for access to care beds, but there’s no guarantee you’ll get a bed if you need it,” Duffy said.
Consumer NZ believed villages’ claims risk misleading consumers about the availability of care services.
It had asked the commission to investigate villages’ aged care claims under sections 11 and 13 of the Fair Trading Act.
Consumer NZ research showed the availability of aged care facilities was a significant factor for many people making the move to a retirement village.
In its 2020 survey of village residents, 50 percent of respondents said access to aged care services was a key factor in their decision to move into their village.
“Consumers should be able to rely on claims made in villages’ advertising. However, residents are being placed in situations where villages’ promises of healthcare aren’t being fulfilled,” Duffy said.
If a care bed wasn’t available when needed, the resident would have to leave their village.
Villages’ failure to provide promised care services was raised several times by residents who participated in Consumer NZ’s survey.
Respondents’ comments included the promised aged care facility had not been built and “continuity of care” was advertised but was questionable.
But Retirement Villages Association executive director John Collyns called Consumer NZ’s request for an investigation “misguided”.
“The sector has always sought to work constructively with Consumer, and we’re puzzled why they believe it is necessary to take this drastic step.”
“Our members are committed to meeting the requirements of the Fair Trading Act, and while retirement village residents are offered priority for care should they need it, to the best of our knowledge operators do not “guarantee” a bed.
The move to care depended on a bed being available and operators knew there was a high demand for care beds. They worked hard to make beds available to residents in their own village, either immediately or in a short time.
For most residents the move to care was straightforward and planned, but it was more challenging if a resident became suddenly ill and required an urgent transfer.
A survey of its principal members showed that more than 87 per cent of residents who needed to move to care could do so in their “home” village.
Just 12.8 per cent moved elsewhere. Most moved for personal choice or the required level of care was not available at their home village. For some residents, beds were not immediately available in their home village, so they moved temporarily to another facility and back to their home village when the bed became available, Collyns said.
Retirement Village Residents Association president Peter Carr said: “The call in our view is both timely and correct, and it's a matter we’ve also been raising ourselves,” Carr said.
Most of the time care facilities were full, and not just with people from within the village but those outside, from other villages and people in respite care, placed there by district health boards.
He was in a retirement village in Cambridge of 270 residents where a care facility was being built with about 64 beds, “and people are really excited about it”.
A spokesman for the commission said it would assess the issues raised by Consumer NZ in accordance with its enforcement criteria.
When deciding whether to open an investigation and what enforcement action it might take at the end of an investigation, the commission considers the seriousness of the issue, the extent of the damage, loss or harm to consumers and the public interest.