OFT flexes its muscles over 'unfair' gym deals

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Gyms offering potentially unfair contracts which customers are unable to cancel are being investigated by the Office of Fair Trading.

The OFT refused to name the companies it is looking into but it is believed to include leading national chains, including Virgin Active and LA Fitness.

Last night Virgin Active admitted it had received a request for information from the OFT while LA Fitness said it was "aware of the OFT's investigation and if we are approached, we will fully co-operate with them".

The inquiry centres around the practice by some fitness chains of locking people into inflexible long-term contracts with no get-out clauses.

It means even if people's circumstances change and they can no longer use the gym, the clubs demand that they carry on paying their monthly fees.

The OFT – which received about 1,500 complaints about gym clubs in the last third of 2011 – said such contracts might be in breach of consumer law and warned that fitness firms might be engaging in unfair practices.

The crackdown follows a landmark court case last August when a gym management firm was found guilty of unfair business practices. Ashbourne Management Services – which draws up agreements and collects payments from around 700 gyms with more than 500,000 clients – was found to be using unfair and therefore unenforceable membership contracts by the court.

The judge ruled that 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 moderate compensation.

Cavendish Elithorn, of the OFT, said after the case: "Businesses cannot hide behind contract terms to engage in intrinsically unfair commercial practices. Both LA Fitness and Virgin Active denied their contracts were unfair. A spokesman for LA Fitness said its policies were flexible "with clauses to cover either termination or suspension of membership when issues occur like redundancy, long-term sickness or employment relocation."

A Virgin Active spokesman said the firm's contracts were "compliant with the Ashbourne ruling and were developed in compliance with guidance published by the OFT."