Good news for gym members - Len Dastards reports
Hola amigos! It is I, Len Dastard, imaginary lucha libre and real life litigation executive. You should all know by now that my famed Topé Smash is as lethal as a habañero pepper. If you don't, believe it. It explains the limp, you see. No, the other leg.
Time for some good news this week. According to many online surveys, the most popular New Years' Resolution is to lose weight. Therefore it is no surprise that gym clubs are usually inundated with new members during January. If you have ever joined a gym then you will be well aware that you are usually tied in for a lengthy term. You lose motivation after a couple of sessions and attempt to cancel and the gym then presents you with a calculation to terminate the agreement making you regret the whole thing.
A very recent case in the High Court brought by the Office of Fair Trading against Ashbourne Management Services Limited (plus directors as defendants) has raised some hope for many that want out of their gym contract. What I will say is circumstances need to be considered in each case. It is not a given that any decision will be binding on you and if you do attempt to cancel your agreement (after being sure it is right to do so) then the case can be used to be persuasive to the gym club to allow you to do so.
In the case many complaints were made to OFT alleging that the defendant was guilty of unfair practices due to the fact that they were imposing minimum durations of 12-36 months for the membership. The defendant would use (as most do) standard agreements for all new members. The gym members would decide that they wish to cancel their agreement without charge. The defendant then (again, as most gyms do) claimed a sum of money as damages or registered any default of membership payment with a credit reference agency (or at least threatened to do so).
The OFT submitted to the court that:
The agreements were regulated by the Consumer Credit Act 1974 and did not comply with the requirement of Section 61(1)(a) of that Act. This section deals with unenforceable loans and the OFT submitted that the agreements were unenforceable but this was dismissed by the court. We will therefore not consider this submission any further.
The minimum terms were unfair under the Unfair Terms in Consumer Contracts Regulations 1999.
Notifying credit reference agencies amounted to unfair commercial practices which is contrary to the Consumer Protection from Unfair Trading Regulations 2008. We have covered these Regulations here.
The court found that submission 2 had some substance by taking into account many members when signing up to a gym overestimate their gym use and their visits dwindle after a couple of months. The court decided that such agreements operated to trap members and this was certainly contrary to good faith. The court also agreed with OFT that notifying credit reference agencies did amount to an unfair practice under the Regulations. The court held that the following was unfair commercial practices:
Including contract terms that do not properly set out the consumer's rights -for example because they are unfair or otherwise poorly drafted.
Demanding payments which are not due - either because the contract, when read properly does not provide for them, or because the term is unfair.
Reporting or threatening to report sums to credit references agencies where the sum owed was unfair, merely a claim for damages, otherwise not due or was disputed by the consumer.
So, if you want out of your agreement then why not give it a crack. The bad news? The gym club is planning an appeal. If such an appeal is unsuccessful then it will be interesting to see how many gym clubs reduce their minimum term or simply allow members to terminate their agreement without charge after a certain length of time. We will keep an eye on any appeal and report back once we know more.
Had a bad experience with a gym club not allowing you to get out of your contract? Get in contact with us [email protected] Until then, adios!