The consumer protection of senior citizens in residential care homes varies depending on who pays for their care. Only those customers who pay for their care entirely out of pocket can demand rectification or compensation of possible defects. These provisions of consumer protection legislation are also applied to customers using service vouchers. Other customers in public services lack this opportunity even as they might pay a considerable share of their care out of pocket. The Consumer Ombudsman and the Consumers’ Union of Finland demand equal consumer protection regardless of how the care is paid.
The consumer protection of senior citizens in residential care homes varies depending on whether the customer pays for the service out of pocket or with a service voucher granted by the municipality, or is covered under an outsourcing agreement between the municipality and private care home or the municipality’s payment commitment. As of now, the Consumer Protection Act is applied only to those services that consumers purchase from private nursing homes or care homes and pay out-of-pocket.
Under the Act on Service Vouchers in Social Welfare and Health Services, consumer protection legislation applies also to service voucher customers even as the voucher is granted by the municipality and the consumer pays only part of the costs as an own contribution. In contrast, customers in residential care housing purchased by the municipality from a private care home as an outsourced service or by payment commitment are not covered under the Consumer Protection Act even as they may pay a significant share of their care out of pocket.
Equal and effective solution needed for compensations for defects
A private care home may house both residents who pay entirely out of pocket and those covered by a municipality’s outsourced services. In the event of flaws or defects in services, only customers paying out-of-pocket can demand rectification and compensation under the Consumer Protection Act. Customers covered under the municipality’s outsourced services lack this option. Instead, they may make a reminder or file a complaint on the defective quality of care to the supervisory authority under the Act on the Status and Rights of Social Welfare Clients.
“From the perspective of consumers, it is problematic that their legal status as customers of the same service provider differs depending on how the service has been paid. Consumer protection in care services should be evaluated comprehensively and with respect to the special characteristics of public services, and an effective solution should be developed for providing compensation for defects,” says Consumer Ombudsman Katri Väänänen.
“Very few customers in residential care housing who pay out of pocket or with a service voucher are currently aware that they are entitled to consumer protection. If these customers are subjected to poor care that is in violation of an agreement, they have the right to, for example, demand rectification of the defect and monetary reimbursement from the company providing residential care housing. If the company rejects the customer’s demands, the matter can be referred to the Consumer Disputes Board. I would like see this right exercised much more extensively,” says Juha Beurling, Secretary General of the Consumers’ Union of Finland.
In connection with the draft bill for freedom of choice in social welfare and health care services, the Consumer Ombudsman has noted that public and third-sector social welfare and health care services should have consumer protection equal to that currently in private social welfare and health care services. However, the provisions on consumer protection were not included in the draft bill. In its draft report (in Finnish), the Parliamentary Social Affairs and Health Committee stated that the situation was problematic for consumers.
Moreover, the Consumer Ombudsman does not consider it justifiable that under the draft bill on freedom of choice, the principles of consumer protection would no longer apply to the customer voucher replacing service vouchers. This would mean that customers in private care homes whose care is paid as an outsourced service or with a customer voucher would be excluded entirely from consumer protection. However, the relationship between a resident and care home is comparable to a contractual relationship between a consumer and a business, which in turn is governed by the provisions of the Consumer Protection Act and general principles of contract law. As early as 2011, the Consumer Ombudsman has provided guidelines (only in Finnish) for businesses providing residential care housing and a checklist on key issues from the perspective of the Consumer Protection Act.
An ongoing legislation initiative by the Ministry of Justice seeks to extend the provisions on liability for defects of the Consumer Protection Act to apply also to services offered to persons. The initiative will also assess the need for extending the provisions on consumer protection to apply to public social welfare and health care services. The Ministry of Justice working group includes representatives from both the Finnish Competition and Consumer Authority and the Consumers’ Union of Finland.