Last reviewed 4 May 2020
The Competition and Markets Authority (CMA) is investigating reports of businesses, including early years providers, that are failing to respect cancellation rights during the coronavirus pandemic.
The watchdog has set up a COVID-19 Taskforce to monitor market developments and identify the big problems facing consumers.
Based on the complaints received, the CMA has identified three sectors of particular concern:
weddings and private events
nurseries and childcare providers.
It will tackle these areas as a priority and then move on to examine other sectors, based on the information received by the taskforce.
The CMA acknowledges that most businesses are acting reasonably in what are unprecedented circumstances, and the current crisis is placing everyone under pressure, but consumer rights cannot be ignored.
If it finds evidence that companies are failing to comply with the law, the CMA will take appropriate enforcement action, including moving quickly to court if a firm does not address its concerns.
Complaints against nurseries included parents being asked to pay very high sums in order to keep a place open for their child.
However, early years leaders have hit back at the claims and suggest it is likely that only a small minority of providers are not acting reasonably.
Neil Leitch, chief executive of the Early Years 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.”