OFT investigates unfair gym contracts
The Office of Fair Trading (OFT) is looking into gym membership contracts
in light of concerns over unreasonable cancellation policies and overlong contracts
Although the OFT has not named any companies, various gym and fitness club operators and chains are subject to an early-stage inquiry.
If any operators are proven to breach consumer protection regulations
, they will be ordered to adjust contracts
on pain of fines or court action.
The investigation follows a ruling in the High Court that the gymnasium firm Ashbourne Management's long membership contracts are unfair.
In August 2011, the court said that Ashbourne must ensure its members were aware that its lengthy contracts were unlawful and that 12-month contracts would be reasonable. At that time the firm administered fees from 300,000 members of 700 small gyms.
OFT's action against Ashbourne was taken after complaints that the firm had tried to stop members cancelling their contracts, some of which were valid for as long as 3 years.
Threats to report individuals to credit reference agencies if they did not comply, risking their credit histories, were among Ashbourne's methods of enforcing contracts.
David Stalker, chief executive of the Fitness Industry Association (FIA), which speaks for various gym operators, said that the FIA believes strongly in adhering to OFT rulings and is happy to play an advisory role.
"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."
Following the ruling, other gyms were instructed to check their contracts to ensure they were not using unfair terms or business practices.
The OFT insists that its investigation is at an early stage. In a statement, the watchdog said: "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."