The Commerce Commission has been asked to probe retirement villages' promises of rest-home level care that in many cases aren't being delivered.
Consumer New Zealand says elderly people are signing up to retirement villages in the belief they will receive rest-home level care when they need it, but often have to move out because care isn't provided.
Residents of retirement home have had to leave to gain health care that they expected within the villages they signed up to. Photo: 123rf
The watchdog has asked the Commerce Commission to clamp down on advertising that creates the impression the care is guaranteed, which is not substantiated by the villages' contracts.
It is also pushing the government to reform current legislation to hold the industry to account.
Consumer NZ research manager Jessica Wilson told Morning Report the body had received complaints from residents who have had to move out to get care, incurring significant financial costs.
"We want to see safeguards in the law to protect consumers' basic contractual rights" - Consumer NZ research manager Jessica Wilson
"Villages give the impression in their marketing and advertising that this aged care is guaranteed," she said.
"If you look at the villages' contracts, which is what we have done, you won't find any such guarantee.
"You may be given priority access to a care bed over non-residents, but there is no guarantee in the contract that it will be available when needed.
"In our view the claims being made by villages are misleading consumers about the services they can expect."
Wilson urged those thinking of moving into a village to scrutinise the actual contract and request the village outline in writing what care facilities it specifically offers, including the waiting times expected before care is received.
"We've also received complaints from consumers who had moved into a village, been promised in the slick marketing pitch that there would be care facilities added to the village at some point in the future, but that hadn't happened," she said.
There were serious financial implications involved for residents who found there was no care bed available to them when they needed it.
"You may be in a situation where you need to sell effectively your right to live in your village unit and then transfer into the facility's hospital bed," Wilson said.
"If you have to move out of the village of course, that means selling your unit as well and that means forfeiting the deterred management fee, which you have to pay the village on exit. It's a significant financial implication for residents when they do need to move out of the village."
The consumer advocate said legislation governing rest homes was well overdue for reform and this needed to happen.
"We want to see safeguards in the law to protect consumers' basic contractual rights to be treated fairly," she said.
"At the moment what we're asking the Commission to do is to clamp down on the claims being made and advertising so residents and intending residents are not being given a false impression."