Investigation into unfair gym memberships

17 Feb 2012

Investigation targets unfair gym memberships.

The end of January 2012 saw an official investigation being opened by the Office of Fair Trading, gauging the unjust terms and conditions of health club membership contracts and the difficulties members are facing with the cancellation of the agreements. The OFT will determine if health clubs, leisure centres and their associated management services, are engaging in unfair business practises under Consumer Protection from the Unfair Trading Regulations Act of 2008.

The investigation will consider the possibility of these companies advocating terms and conditions which breach the Unfair Terms in Consumer Contracts Regulations 1999. Any instances of companies not conforming to the regulations will be ordered to make alterations, and if they fail to comply, fines and court action could be dealt. The enquiry focuses primarily on the treatment of customers who wish to cancel their long term memberships following a change in circumstances.

The action taken by OFT follows a landmark High Court case against Ashbourne Management Services Ltd in 2011. AMS are responsible for drawing up agreements and collecting payments for independent gyms covering more than 500,000 members. Their contracts routinely state that consumers could not terminate their memberships at any time during their minimum membership period of one to three years. With no option for cancellation, whilst disregarding a possible 30 days notice or moderate sum in compensation, the conditions of their contract were deemed unfair. The judge set out to place an enforcement order against Ashbourne, preventing them from relying on their current contract terms. This ruling was applied solely to Ashbourne, however, to avoid any wider implications, other health clubs and their management services were instructed to revise their contracts and amend them accordingly.

The news follows a storm of controversy around a particular chain of health clubs and their persistence in demanding the payment of membership fees from a pregnant member, who was also made redundant around the same time. Despite notifying the local gym about their change in circumstances, she was forced to continue payments until public pressure persuaded the company to back down. It now seems that the OFT has decided to investigate the matter in a wider context, although, it’s been stressed in a statement that the investigation is still at an early stage.

The backlash over high monthly fees and poor customer service has seen a host of alternative gym options become available for those looking to keep in shape. A number of gyms are now offering additional free day passes to potential customers before they commit to a contract, and more and more companies refuse to provide a fixed period contract and offer a pay as you go scheme. These changes to health club membership policies means more people are inclined to visit their local fitness centre without the worry of soaring prices and restricted contracts.