Contracts at Bannatyne Fitness, David Lloyd Leisure and Fitness First deemed 'unfair' by OFT
Three of Britain's biggest gym chains have had to change their contracts to make it easier for people to cancel, after the Office of Fair Trading ruled their terms and practices were unfair.
Bannatyne Fitness, David Lloyd Leisure and Fitness First have all been forced to change their contracts after they were found to be making it difficult or impossible for people who were injured or made redundant to exit their gym agreements early.
Members of the gym groups are now able to cancel their contracts early should their circumstances change in a way that makes attendance at the gym difficult or unaffordable.
The gym groups have also had to reduce the notice period needed to cancel contracts that are longer than one year, and will no longer be able to describe membership as being of a fixed duration if the contract automatically continues on a rolling basis after the initial membership period has expired.
Bannatyne's was also singled out for chasing gym-goers with "misleading" debt collection letters that sometimes threatened recipients with what appeared to be official-looking court documents, or making other unsubstantiated claims about action that had been taken. It will now stop sending these letters and is reviewing its other debt collection letters.
"Millions of people are members of gyms, and a membership contract can easily be a financial commitment of more than �500 per annum," said Cavendish Elithorn, senior director of the OFT's goods and consumer group. "We were concerned that contracts could unfairly lock people in if their circumstances changed, forcing them to continue paying even if they had lost their job.
"We welcome these changes from Bannatyne's, David Lloyd and Fitness First. As well as making contract terms clearer, the revised contracts also grant members, and prospective members, more flexibility."
The action taken against the three gym chains is part of an ongoing investigation the OFT started in January 2012, and stems from a court case involving Ashbourne Management Services, which draws up agreements and collects payments for gyms.
The judge in that case concluded a contract was unfair if it ran for longer than 12 months and did not allow the consumer to cancel with 30 days' notice and a moderate penalty. The OFT is looking at gym contracts in light of this ruling. It confirmed it is continuing its investigation into some other companies, believed to include LA Fitness, and will provide an update in the next few weeks.
In January 2012, LA Fitness caused a storm of protest after an article in the Guardian told the story of Hannah, a reader from Billericay in Essex, who was seven months pregnant and wrote to the paper after her husband lost his job, leaving the couple living on benefits.
Hannah and her husband, who were about to move 12 miles away from their nearest gym, had been LA Fitness members for seven years and asked the gym chain to reconsider their two-year contract. But the gym insisted the couple pay the remaining 15 months, a total of �780. A protest by thousands on Twitter helped persuade the company to back down, and raised further questions about the fairness of long-term gym contracts.
Some gym chains made changes to their contracts once the OFT investigation started. The watchdog closed its investigation into Virgin Active in April 2012 after the company relaxed some of its terms.
A spokesperson for Bannatyne's said: "Bannatyne Health Clubs are uniformly operating under contracts that meet the OFT recommendations with regard to length of contracts and provisions relating to cancellation due to illness.
"As a major national operator we have never used external debt collecting agencies and our contracts have never been greater than the 12-month maximum term proposed by the OFT."
David Lloyd Leisure said: "Following extensive discussions with the OFT, DLL introduced improvements to the flexibility of its membership contract terms and conditions from December 2012.
"Primarily, DLL simplified ? and further clarified ? the ability for members to join either with short- or longer-term commitments and to switch between the two, as well as expanding those circumstances in which membership can be suspended or ended."
A Fitness First spokesman said: "We have happily accepted all recommendations from the OFT to make contract terms more transparent, allowing more flexibility for our members."
Source: http://www.guardian.co.uk/money/2013/mar/07/gym-chains-forced-relax-contract-terms-oft
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