7 Feb 2016

Gyms told to shape up on membership contracts

10:55 am on 7 February 2016

Many gyms are using "draconian" clauses to lock members into unfair contracts, Consumer New Zealand says.

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An investigation by the consumer watchdog has found many contracts contained terms which could breach the Fair Trading Act.

Consumer chief executive Sue Chetwin said a ban on unfair or unreasonable terms in consumer contracts had been in place since March last year.

A Consumer review found the industry had been slow to respond to the law change, she said.

"We've found some pretty draconian cancellation clauses."

"In one gym you have to resign from the gym standing at the counter and the manager has to sign it, and many of their cancellation policies require the gym to acknowledge you have cancelled."

Such clauses were likely to be unenforceable and in breach of the Fair Trading Act, she said.

Miss Chetwin encouraged gym members to complain if they had been given a contract they believed was unfair.

"We've put standard letters on our website that consumers can use to lodge complaints.

"The Commerce Commission is looking at some terms so gyms are on notice now that they need to make changes."

Find out more about Consumer NZ's Play Fair campaign visit here.

The Fair Trading Act defines a term as unfair if it: would cause a significant imbalance between the rights of the company and the consumer, is not reasonably necessary to protect the legitimate interests of the company, and would cause detriment, whether financial or otherwise, to the consumer if it were to be applied or relied on.

Examples of potentially unfair terms in standard gym contracts:

  • The contract shall continue indefinitely after the minimum term until a request to terminate is made. There is a notice period of 30 days during which time any payments that fall due must be paid - Debitsuccess contract for Configure Express.
  • Membership may be cancelled by completing the club's cancellation form. This form must be filled out over the counter at the gym and countersigned by the manager before taking effect - Snap Fitness.
  • The gym reserves the right to change, alter or adapt timetables, facilities or location at any time. Suspension of your membership is at the gym's sole discretion - Habit Health & Fitness.
  • The member releases the company and its employees, contractors and agents from all liability and responsibility whatsoever, for personal injury, property damage or death however caused including, but not limited to, the negligence of the company or its staff or any other person using the premises - Exodus Health & Fitness Club.