Gym memberships are to be investigated by the Office of Fair Trading (OFT) after complaints were raised about unfair cancellation procedures and long contracts.
The commercial properties under investigation have not been named, but the inquiry is still in an early stage.
A statement from OFT stated: “This investigation is at an early stage and it should not be assumed that the parties involved have breached any consumer protection legislation.
“The OFT will not reach a view on whether the law may have been infringed by any company until it has completed its investigation.”
If a gym is found guilty of breaching contracts, they will be ordered to change their terms within the contracts or face a hefty fine.
David Stalker, Chief Executive of the Fitness Industry Association (FIA), spoke of his compliance to assist OFT with their investigation, as they represent a number of gym commercial properties: “At the FIA we strongly believe in following the rulings drawn up by the OFT and are happy to play an advisory role in this investigation process.
“The FIA’s vision, to get more people, more active, more often, is shared by our members who offer a wide variety of membership options to suit individual budgets and training needs, placing consumers at the heart of their offering and motivating people to lead an active lifestyle.”
The investigation came to light after Ashbourne Management, who are responsible for drawing up contracts for gym memberships and collecting payments, was found guilty of unlawful contract terms. Some complaints from customers said that they had been trying for over three years to cancel their contracts, to no avail.
Ashbourne used various techniques to keep customers in contracts, like threatening to report them to credit check companies if they didn’t carry on paying, therefore damaging their credit rating.
The court stated that 12 month contracts were reasonable and asked other gyms to check the terms to ensure that their contracts were fair and lawful. Since Ashbourne were under investigation, they have now scrapped long contracts and have a maximum of 12 months only.
Speaking of the Ashbourne investigation, Cavendish Elithorn, Senior Director of the Goods and Consumer Group at OFT, stated: “We are pleased that the enforcement order has been granted by the High Court, and urge gyms that use similar contracts that they should review their customer contracts for fairness. This judgment and order make clear that businesses cannot hide behind contract terms to engage in intrinsically unfair commercial practices.
“Gym companies should also be aware that trying to enforce illegal contract terms is a breach of the law and in certain circumstances they may have a duty to notify customers where their contract terms have been found to be illegal.
“This case sends a clear signal to traders that the OFT and local trading standards services will not hesitate to take action to protect consumers.”
Have you started a health kick this year and have just signed a contract, or are you tied into a long contract with your local gym? If you feel the contract is unfair, you should check the terms and speak to the gym: “Any consumer who feels that they have an unfair minimum term and wishes to end their contract should now feel able to challenge the terms with their gym,” as Cavendish Elithorn said.
