January always sees a surge in gym membership. Now the OFT is cracking down on unfair terms and conditions in the long contracts people are made to sign
For those yet to act on a new year’s resolution to join a gym, the best advice may be to sit tight for a few more weeks. Lengthy contracts with conditions that make it almost impossible to bail out early could be a thing of the past after a crackdown by the Office of Fair Trading.
At the end of what is always the busiest month of the year for gyms, the OFT is expected to announce that it will outlaw contracts that last longer than 12 months or do not contain a get-out clause for members who, for example, lose their job or sustain an injury. The move follows a year-long investigation into a number of gym chains, believed to include LA Fitness, Fitness First and Bannatyne’s. The OFT is also understood to be looking at debt collectors that some reports say use aggressive practices in chasing money owed to gym groups.
“Memberships of gyms and health and fitness clubs soar each January,” said the OFT’s Cavendish Elithorn, who is leading the investigation. “People can initially be enthusiastic about a new fit and healthy lifestyle, but then find they can’t go as often as they’d intended, or their circumstances change.
“We are investigating a number of companies that operate fitness club chains or provide management services to gyms over concerns about unfair terms or business practices. These include tying consumers into lengthy terms with limited rights to cancel should their circumstances change, and using misleading debt collection practices.”
This time last year LA Fitness caused a storm of protest after an article in the Guardian told the story of seven-months-pregnant Hannah, a reader from Billericay in Essex, who 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 have made changes to their contracts since the investigation started; the OFT warned it will take to court any that do not comply.
In the past fortnight, both the OFT and Citizens Advice have posted online advice for people thinking of signing up. Almost nine million people, about 17% of the adult population, belong to a gym or health club, according to market researcher IbisWorld. Yet last year online accountant Crunch.co.uk calculated that Britons waste a collective £37m a year on gym memberships and exercise and slimming classes they never attend.
Gym memberships typically cost between £30 and £90 a month, and can tie members in for up to 24 months. Some stipulate that those who leave early pay the remainder of the contract, which can run to hundreds of pounds. Citizen’ Advice said it was expecting a surge in complaints about gym membership in the next few months as people realise they cannot get out of them.
“The problem is that people do not always realise that if you enter into an agreement you are legally bound by every single one of the terms and conditions in that agreement,” said Sam Tappenden at Citizens Advice. “People tend to scan gym contracts briefly and sign them on the day rather than taking them away and reading them properly.”
The OFT’s investigation stems from a court case involving Ashbourne Management Services, which draws up agreements and collects payments for gyms. The judge concluded that 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.
Some gyms have already cut their longest contracts: Fitness First said it no longer locks people in for more than year, and is introducing four-monthly and monthly contracts. It said: “Fitness First is in constant liaison with the OFT on all contracts and has been for a couple of years. Changes have been made in line with its instructions in the past couple of months.”
Bannatyne’s said it does not offer contracts longer than 12 months. LA Fitness still offers contracts of up to 24 months. It said: “We’ve worked with the Office of Fair Trading since the beginning of its inquiry last year and believe our member pledge, launched in March, and our current terms and conditions, reflects its guidance and recommendations.”