Elderly people were put at risk in two substandard nursing homes, says the Commission for Social Care Inspection.
The issue of standards in care homes is contentious
A whistleblower, who worked at Laurel Bank home in Halifax, told Panorama of "mental torture" and verbal abuse.
The ex-worker said she had seen residents hit with towels, splashed with water and shouted at. One resident said she had been slapped in the face.
The homes watchdog says Laurel Bank has improved but plans to shut another home in Halifax, the Haven.
The former care worker at Laurel Bank, employed between 2002 and 2003, told the BBC programme that an elderly female resident had been humiliated by staff.
"Towels, flannels, you know, slapped on her bare arse. Water splattered in her face like that and the tap like that and she's screaming to shut her up. Not to shut... the only way I can explain it is to give her something to scream about really.
"You know when a child's been naughty, 'I'll give you something to cry about or whatever', do you know what I mean? That's the only way I can explain it. And that's mental torture, that's abuse if you ask me. That is abuse."
She said relatives were unaware of what was happening.
"They only saw what they were supposed to see. People were fed when relatives were there and not when they weren't. They were left to do it on their own."
The home is now said to have "significantly improved" but the forerunner of the CSCI, the National Care Standards Commission, has admitted that it took too long to deal with the problems at Laurel Bank.
And Panorama has learned that despite the investigation by the commission, residents' families were never informed there were concerns over Laurel Bank.
Calderdale Council, which covers the area where both the homes are located, said it had learned from the experience.
Laurel Bank owner Christopher Bolland has refused to be interviewed for the Panorama programme, saying in an e-mail that the home had already been judged to be guilty by programme-makers.
Manager Linda Parker was quoted by the Daily Telegraph as saying the allegations were "rubbish", but admitting mistakes had been made in the past.
CSCI inspectors want to close another home in Halifax, The Haven. It remains open while its owners appeal against closure.
The inspectors made 21 visits in one year to intensively monitor standards at the home.
Mike Rourke, the director of inspection regulation and review, told Panorama: "This home did not improve. Elderly vulnerable people were at risk."
Again, not all residents were told there were concerns over standards of care at the home.
Arthur was placed in the Haven in 2005 because of his worsening dementia, and his stepson John soon raised concerns about bruising on his stepfather's arm.
But John was completely unaware that inspectors were recently investigating allegations of physical abuse against a member of its staff, who has since been sacked.
Tariq Malik, whose family run the Haven, declined requests for an interview but said in a statement: "Problems at the Haven are symptomatic of a much wider picture.
"Many small homes are struggling because they cannot afford to pay good salaries to get the right managers."
Mr Malik said funding from local authorities was inadequate but that the company had learned "painful but valuable lessons".
The Haven was appealing against closure and it wanted time to bring in a new manager, he said.
Mr Malik insisted staff training had been improved, that "improper restraint techniques no longer apply" and that any member of staff accused of abuse was suspended while investigations were carried out.