Customers looking to join the gym this winter at either LA Fitness, Dave Whelan Sports or the Harlands Group will now be given fairer and cheaper cancellation rights if they decide the arrangements aren’t for them. With a combined membership of 1.2 million, the trio have agreed to make contracts more transparent and easier to understand – while making them easier to quit without being hit with exorbitant penalty charges.
The development follows a probe into issues of inflexibility and unfairness in the sector by the Office of Fair Trading (OFT). In its investigation, the OFT found that some members were being trapped in 24-month contracts and charged fees of more than £500 if they wanted to leave. Even if customers had extenuating circumstances – such as injuries, sudden unemployment or the need to relocate for family or work-related reasons – the OFT discovered that they still faced cancellation bills equivalent to full-year payments.
Importantly, the culture change that the probe has enforced demonstrates that trying to financially profit from alienating or annoying customers is not the wisest business model – and that managers who go to war with their customers are unlikely to be on sustainable turf. David Lloyd Leisure, Fitness First Clubs and Bannatyne Fitness (managed by Dragon’s Den star Duncan Bannatyne) all amended the terms of their contracts earlier this year – but the OFT is writing to a further 20 health and fitness operators urging them to review unfair clauses in their customer contracts. According to the OFT, any new terms and conditions should observe the following points:
1. Extended rights for members
Enabling them to cancel contracts early, should their circumstances make attendance difficult or unaffordable – for example, if they lose their jobs or suffer injuries.
2. No description of fixed duration
If the membership contract automatically continues on a rolling basis after the initial period has expired.
3. Greater transparency about membership features
Such as initial duration and cancellation rights, with all details provided upfront as part of the sales process.
OFT executive director Cavendish Elithorn said: “As a result of our investigation, millions of eligible gym members now have better contract terms, including improved cancellation rights that prevent them being unfairly locked in if their circumstances change. This should be a warning to the rest of the industry that we will not hesitate to take action where we find evidence of consumers being treated unfairly.”
However, Elithorn added, it is still incumbent on new gym goers to scrutinise the terms of their contracts before signing up. “Alarm bells should ring if gyms are not being clear and upfront about their terms and conditions,” he said, “including the length of the contract and cancellation rights. If consumers are told something that is not in the terms and conditions, they should ask for written confirmation.”
The OFT said it would continue to monitor compliance alongside Trading Standards.