Courses and packages are ordinary in this field and are not inherently a problem. What they do is move risk from the business to you, and the amount of risk moved is proportional to how far in advance you have paid.
What prepayment actually does
When you pay for six sessions and have one, the business holds your money and owes you a service. If the business stops trading, you become a creditor. Consumers in that position are typically unsecured creditors, and unsecured creditors in an insolvency usually recover little or nothing.
That is the structural fact behind every story of a clinic closing with prepaid customers. It is not fraud in most cases. It is the ordinary consequence of having paid in advance to a company that failed.
This is also why the Companies House check in the entity article is more than a formality when a large prepayment is involved. You are, in effect, extending credit to that company.
The terms to read before paying
- Which legal entity is the contract with, by registered name and number.
- Do sessions expire, and if so when, and what happens to unused ones.
- Are unused sessions refundable, and on what basis, and how is the refund calculated.
- What happens if I am advised to stop treatment on clinical grounds.
- What happens if the practitioner I chose leaves.
- What happens if the business ceases trading, and is any of my money protected.
Expiry deserves particular attention. A course that must be used within twelve months converts a purchase into a deadline, and the deadline is set by the seller. Whether such a term is fair depends on the circumstances, and it is examinable under the unfair terms provisions described in what consumer law actually gives you.
- Open
- Companies House, before you hand over a large sum
find-and-update.company-information.service.gov.uk - Type in
- The registered company name and number from your quotation. Read the company status, the filing history and the officers.
- A good result looks like
- An active company, filings up to date, no insolvency related filings, and the name matching the entity on the quotation and the payment reference.
- An ambiguous result looks like
- Company status showing proposal to strike off, liquidation or administration. Overdue accounts. A company incorporated very recently where a substantial prepayment is being sought.
- What it does not prove
- That the company will still be trading in a year, which no register can tell you. It tells you the position today, which is the most you can know.
- Note
- The larger the prepayment, the more this check is worth. You are effectively extending credit to that company.
The clinical question inside a commercial one
There is a specific problem with prepaid courses in a clinical context that has nothing to do with insolvency. If you have paid for six sessions and after two the clinician thinks you should stop, the financial arrangement is now pulling against the clinical judgment.
A well run service handles this by refunding or crediting unused sessions where treatment is stopped on clinical grounds, and by saying so in its terms. Ask the question directly before paying: if you advise me to stop partway through, what happens to the sessions I have paid for. The answer tells you whether the commercial structure has been thought about clinically.
The same applies in reverse. If a course is recommended before any assessment, the recommendation did not arise from an assessment. That pattern is described in what a sales pitch looks like instead.
| Purchase pattern | Risk to you | Mitigation |
|---|---|---|
| Pay per session, as you go | Low | None needed |
| Deposit, balance on the day | Limited to the deposit | Check the deposit terms for fairness |
| Course paid in full upfront | The whole sum, until sessions are used | Pay by a method giving a third party route, check the entity |
| Membership with monthly payments | Depends on notice and minimum term | Read cancellation terms and minimum period |
| Course funded by credit | You may owe the lender regardless of delivery | Check both firms on the FCA register, read the agreement |
A framework written by this publication to organise the procedure. It is not a measurement, a guideline or a regulator's classification.
Deposits specifically
Deposits serve a real purpose. A clinic that holds an appointment loses time if you do not attend, and a deposit reflects that.
Two questions make a deposit reasonable or not. Is the amount proportionate to the loss the business would actually suffer, and is the policy applied both ways, so that if the clinic cancels at short notice something equivalent happens.
A deposit set at a level that penalises rather than compensates, or a term that keeps a deposit in circumstances where the business suffered no loss, is a term that can be examined for fairness. That does not mean it is automatically unfair, and it does not mean you should assume it is enforceable either.
How to pay, if you are going to prepay
If you decide to buy a course, the payment method is the main lever you have.
Paying by credit, where the statutory conditions are met, can give you a route against the card issuer or creditor if the service is not supplied. Paying by bank transfer gives you no comparable route. The conditions and thresholds are covered in the finance article, and they are worth a minute's thought before a large prepayment.
Consider also whether you need to buy the whole course at once. The discount for prepaying six sessions is the price of the risk you are taking on. Sometimes it is worth it. It is a decision rather than a formality, and it is easier to make before the card is out.
If the business closes
Act quickly and in this order. Establish the position of the company, which is visible on Companies House. If you paid by card or under a credit agreement, contact the provider immediately, because time limits apply. If an insolvency practitioner has been appointed, register your claim, without expecting much. And keep every document, because each route will ask for the same file.
Where treatment was partly delivered and something went wrong clinically, a complaint about an individual registrant can still be made to their professional regulator even if the company has ceased trading, because that complaint is about the person. That distinction is set out in who you complain to.