Gyms investigated for unfair contracts

 

The Office of Fair Trading (OFT) has launched an investigation into unfair gym contracts. It refused to name the companies under investigation but it is believed to include leading national chains, Virgin Active and LA Fitness.

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

The probe 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 said such contracts may be in breach of the unfair terms in Consumer Contracts Regulations 1999. It also warned that fitness firms may be engaging in unfair business practices under the Unfair Trading Regulations 2008.

The crackdown follows a landmark court case last August when a gym management firm was found guilty of using unfair terms and business practices.

Ashbourne Management Services - which draws up agreements and collects payments from about 700 gyms with more than 500,000 clients – was found guilty of 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.

Both LA Fitness and Virgin Active denied their contracts were unfair. A spokesman for LA Fitness said its policies are 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 "are compliant with the Ashbourne ruling and were developed in compliance with guidance published by the OFT".

Case study

When Anna Harding was offered a job in Newcastle she tried to cancel her membership with LA Fitness in Rugby. But the firm told her she could only cancel the £35 a month contract if she paid £200 compensation.

"Rather than paying £200 for nothing, I tried to find someone else to take up the membership, as they agreed that was allowable," said 24-year-old Anna.

"But I simply ended paying £35 per month for six months for a gym that it was impossible for me to go to! It also meant I couldn't go to any gym for six months as I couldn’t afford another membership up here on my wage."

"Something needs to change to stop this happening as it's so unfair!"

LA Fitness refused to comment on Anna’s case.

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