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Nurseries should be refunding parents who have already paid for childcare they have not used due to coronavirus, it has been advised.
The Competitions and Markets Authority (CMA) has issued an open letter to the early years sector with advice to help nurseries comply with consumer law during the Covid-19 pandemic.
In the letter, they explain: "This letter (and the advice which accompanies it) does not introduce new laws or rules for providers, but rather they explain how the current law applies in the present circumstances."
The CMA identified three main themes that seemed to be problematic, including parents paying for services that could not be fulfilled and nurseries threatening a child's place will be lost, if fees are not met.
The advice comes after the government closed all schools and nurseries on 20th March in a bid to reduce the spread of coronavirus. Education facilities were only permitted to open for vulnerable children or those of key workers.
However, research from Which? found approximately 30 per cent of parents were paying full price for their child's nursery place throughout lockdown, even though they were not attending.
The CMA explained: "Our view is that: Consumers should not have to pay for services that cannot be provided; consumers should also be offered a refund where services are paid for in advance but do not take place as agreed in the contract.
"Contract terms requiring consumers to pay providers who are not providing the services agreed in the contract are likely to be unfair and unenforceable."
They did recognise that some payments were being made in return for home learning.
"We are aware that some contracts in the sector allow for a payment contribution to cover costs during a temporary interruption in service," they continued.
"As we are seeing during the pandemic, an interruption in service may also include providing services in different ways to what was previously agreed (for example, temporary changes to how the service is delivered such as home learning support)."
They also addressed the issue of nurseries placing pressure on parents to make payments by threatening that the child's place will be lost if they do not.
This, they warned, is likely to be both unfair and illegal.
"Our view is that where legislation or other lockdown measures mean parents cannot make use of these services for a period of time, it is likely to be an unfair and illegal practice to warn or threaten to remove a child's place unless the parent continues to pay full or substantially full fees during periods of lockdown," they clarified.
The CMA did explain, however, that they would be unlikely to object to small contributions (for example to rent or mortgage payments) while services are disrupted, as long as they are low and do not seek to cover other costs which are reimbursed in other ways (for example, the government's furlough scheme, via insurance or mortgage holidays).
You can read the advice in full here - it's certainly worth a read if you, or a family member, has a child enrolled in nursery.
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