Care homes may be charging families for extended periods after a resident has died as well as large upfront fees, a competition inquiry has revealed.
The concerns emerged from the initial findings of a review by the Competition and Markets Authority (CMA) which began in December.
The CMA has now opened owing to fears that there could be breaches in consumer law.
There are more than 400,000 people in care and nursing homes in the UK.
Elderly care proved to be a significant area of debate during the recent election campaign.
Some of the other issues raised during the first stage of the inquiry included:
- People finding it difficult to get the information; confusion about the social care system and funding options; and a lack of clarity over finding and choosing between homes
- A lack of information about prices on care home websites; and care homes' contracts giving homes wide-ranging discretion to ask residents to leave at short notice
- Little investment for the future, given that the number of people aged 85 and over is projected to more than double by mid-2039
"Some of the most vulnerable people in our society use care homes, often moving to them under extremely difficult circumstances. It is therefore essential they are able to make informed choices, understand how services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have any concerns," said the CMA's acting chief executive, Andrea Coscelli.
"Demand for care home places is expected to surge over the next two decades. To make sure the additional capacity this requires is available, it needs to be built in good time. At present, short-term funding pressures and uncertainty mean that the sector is not attracting investment. We will be focusing on finding ways to deal with these, and other concerns identified."
Citizens Advice chief executive Gillian Guy said: "Older people and their families are suffering unnecessary distress and financial pressure due to gaps in consumer protection in the care home market.
"The CMA is right to look at consumer protections and should seek to strengthen these where existing rules are not providing the right cover, including the notice period for fee increases and protections for people's deposits."