Gym contracts fall under OFT spotlight

Office of Fair Trading will look at whether gym membership contracts at all major national chains break rules on fairness

Lengthy gym contracts that customers find themselves unable to cancel are to be investigated by the Office of Fair Trading (OFT), which will look at whether they break rules on fairness to consumers.

The OFT has opened an investigation under the Enterprise Act 2002 into a number of companies that operate gym and fitness club chains, or who provide management services to gyms – it is understood all major national gym chains will be looked at.

It is considering whether these companies are using or recommending terms that breach the Unfair Terms in Consumer Contracts Regulations 1999, or are engaging in any unfair business practices under the Consumer Protection from Unfair Trading Regulations 2008.

Companies found to be breaking the rules will be ordered to make changes and, if they fail to do so, could face fines or court action.

The investigation, which was first revealed on, will focus on long contracts and how gyms treat customers who want to cancel their membership following a change in circumstances.

It follows a high court case between the OFT and Ashbourne Management Services, a company that draws up agreements and collects payments for gyms.

Ashbourne’s contracts had minimum membership periods of between one and three years, and Ashbourne routinely stated that consumers could not terminate their membership.

After a four-day hearing the judge in the case ruled that, among other things, a contract was unfair if it was for longer than 12 months and did not allow the consumer to cancel with 30 days’ notice and pay a moderate sum in compensation.

The ruling only applied to Ashbourne, but the OFT warned at the time that it would have wider implications for the whole industry and asked companies to look at their contracts and amend them if necessary.

A spokeswoman for the OFT said that despite firms having several months to make these changes, it was still concerned that contracts were unfair. In the four-month period to December 2011 it received approximately 1,500 complaints about gyms.

The news follows a storm of controversy around LA Fitness and its decision to insist that a Guardian reader and her husband continue to pay their membership fees after she became pregnant and he lost his job.

Despite telling their local gym about their change in circumstances they were forced to keep paying, until public pressure persuaded the company to back down.

Hilary Osborne
Lisa Bachelor © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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