LA Fitness improves gym contracts

10 September 2013

LA Fitness and Dave Whelan Sports (DWS), which collectively have over half a million customers, have agreed to improve their gym contracts to give consumers better rights.

The two gym chains have agreed to give consumers better cancellation rights and make their contract terms more transparent following an investigation by the Office of Fair Trading (OFT). It warned it will take action against any fitness firm not treating customers fairly.

The OFT is engaged in a long-running battle with gym companies. In August 2011, the judge in a high court case between the OFT and gym management company Ashbourne Management Services, ruled that a contract was unfair if it lasted longer than 12 months and had no clause allowing customers to cancel with 30 days' notice.

In 2012, LA Fitness was embroiled in a high-profile case uncovered by the Guardian newspaper, when it refused to allow a couple to exit their contract even after the woman became pregnant and her husband lost his job.

In December 2012, the OFT issued a consumer alert advising consumers of their rights when joining a health and fitness club.

The OFT then launched an investigation in January 2013 looking at lengthy gym contracts that customers find difficult to cancel, especially when their circumstances have changed. It looked at companies that operate gyms or fitness clubs as well as firms that provide management services to gyms.

In March 2013, following the launch of the OFT's investigation, Bannatyne Fitness, David Lloyd Leisure and Fitness First all agreed to change their contract terms to make them more transparent and give their members better cancellation rights.

But the OFT is clearly still concerned that gym companies are operating unfairly – it has also written today to 20 health and fitness operators, highlighting contract terms and commercial practices which may be considered unfair and advising them to review their contract terms.

The undertakings to the OFT from LA Fitness, DWS and Harlands Group (a gym management company which manages over 900,000 customer contracts) include:

  • Extended rights for members to cancel their contracts early should their circumstances change in a way that makes attendance at the gym difficult or unaffordable - for example if they lose their job or suffer an injury.
  • A commitment not 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.
  • Greater transparency about key membership features, including initial membership periods and cancellation rights, and for these to be provided upfront as part of the sales process.

Better contract terms

Cavendish Elithorn, OFT executive director, said: "As a result of our investigation, millions of 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.

"Anyone considering joining a gym or health club should carefully consider the contract terms before signing up. Consumers should shop around and ask questions. Alarm bells should ring if gyms are not being clear and upfront about their terms and conditions, 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."

The OFT has the power to fine companies or take them to court if it decides they have breached consumer law

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