Retirement operators warned about misleading
Continuum of care, contracts under scrutiny
The Commerce Commission has investigated and written to 12 retirement village owner-operators with more than 180 villages after Consumer NZ complained about false and misleading claims alleged to have been made.
The commission has warned those 12 about misleading claims on the continuum of care and unfair contract terms, a move welcomed by Consumer NZ yesterday.
Letters released under the Official Information Act show Nzx-listed, multibillion-dollar companies Ryman Healthcare, Arvida Group and Oceania Healthcare got letters, as well as delisted foreign-owned Metlifecare and privately owned Heritage Lifecare Villages, Tamahere Country Club, Ultimate Care Group, Vines Co, Althorp Village, Coastal View, O¯ mokoroa Healthcare and Palm Grove Partnership.
The commission said the letters did not represent a formal finding that any of those 12 operators had broken the law.
“Only the courts can decide if a breach of the law has occurred,” the commission said.
Yet it found 52 clauses from six operators that were potentially unfair.
In response, executive director of owner group the Retirement Villages Association, John Collyns, said the commission had identified some historic clauses in a handful of operators’ occupation rights agreements not used by most and operators would be encouraged to update or clarify clauses and engage constructively with the commission.
“These clauses include the definition of wear and tear in a unit, striking the right balance between the need for villages to invest and modernise but ensure residents do not suffer a loss of amenity and allowing for sufficient time for families to collect possessions when a resident passes away,” Collyns said.
Consumer NZ said: “We called out the big guns, such as Ryman Healthcare and Arvida, and lodged an official complaint to the commission for potentially misleading consumers with their continuum of care claims.”
While advertising on the villages’ websites implied a continuum of care was available, the fine print in the standard terms and conditions limited residents’ rights and access to aged care services, Consumer NZ said. A continuum of care was generally only available at the villages’ discretion. It can depend on whether there is space available in the facility, the village agrees to it, and a needs assessment shows an increased level of care is needed.
The commission said it had examined claims about that continuum of care when it said villages couldn’t guarantee residents could transfer to hospitals or higherneeds care.
As part of its investigation, it revisited Consumer NZ’S complaint from late 2021 about how retirement village operators are marketing aged residential care services. The main concern was how website continuum of care claims risked misleading consumers and risked breaching the Fair Trading Act.
The complaint cited an Avida claim about care and support on its website: “If you need care or extra support at any point, you’ll have priority access to an available Arvida care centre, either in your current community or at another Arvida community.”
But the commission said statements were alleged to be at risk of misleading consumers.
“In our view, the statements made on Arvida’s website regarding aged residential care services . . . may risk misleading the public when compared to the contractual right that a resident of an Arvida village has to such care services,” the commission said.
This was a possible breach of the law, the commission said in its preliminary assessment.
A document from The Vines gave it “the right to add or remove buildings, areas or amenities to the facilities”.
The commission said its decision to take no further action on such matters did not prevent others from doing so.
It recommended retirement village companies seek legal advice about the issues it had raised.
Collyns said his association did not accept the commission had found retirement village businesses making claims were false or misleading, although he is encouraging some operators to update their contracts.
“We note that the commission stresses that its role in this matter is educative because no operator has breached the Fair Trading Act,” Collyns said.
Meanwhile, a wider review of the sector is under way.
Last year, NZME reported village owners could be forced to repay residents’ money within six to 12 months and be banned from charging weekly fees once people have left their places.
A long-awaited shake-up from Te Tu¯a¯papa Kura Ka¯inga Ministry of Housing and Urban Development is in its third year. In 2022, the ministry began its probe.
More than 51,000 people live in retirement villages, owned by some of the largest Nzx-listed companies.
Retirement Commissioner Jane Wrightson has encouraged people to submit their views on the ministry’s proposed changes.
"We called out the big guns, such as Ryman Healthcare and Arvida, and lodged an official complaint to the commission for potentially misleading consumers with their continuum of care claims." Consumer NZ