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Gyms face crackdown on long-term contracts

Office of Fair Trading to launch review after controversy provoked by Guardian story about LA Fitness refusing to drop fees owed by pregnant woman and jobless husband

A crackdown on gym contracts that customers cannot cancel is expected next week after the Office of Fair Trading warned fitness centres for a second time within a year not to sign people up to unfair agreements. The OFT is likely to focus on long-term contracts that do not allow members to cancel if their circumstances change. The move comes after a story about LA Fitness published by the Guardian caused a outrage on the social networking website Twitter. The chain had refused to drop fees owed by Hannah, a heavily pregnant woman and her unemployed husband.

The couple, who have a young child, were about to be made homeless and could not afford to pay the remainder of their two-year deal with LA Fitness. Hannah wrote to the Guardian’s consumer champions’ column for help, but despite repeated arguments by the newspaper that there were legal and compassionate reasons for the couple’s outstanding charges to be reviewed, the gym chain refused to budge.

The couple were only freed from their contract after Guardian readers offered to pay the fees, shaming LA Fitness into dropping them.

At the same time, the story began circulating on Twitter, where thousands of people expressed their anger, with many threatening to cancel their own memberships with the chain. “Just wrote to LA Fitness and ended my membership. DD [direct debit] cancelled. Let them sue us all,” said one.

Last year the OFT won a landmark case in the high court against Ashbourne Management Services, a company that draws up agreements and collects payments from gyms, and has more than 500,000 clients.

Ashbourne’s contracts had minimum membership periods of between one and three years and Ashbourne routinely stated that consumers could not terminate their membership. After a four-day hearing, the judge in the case ruled that, among other things, a contract was unfair if it was for longer than 12 months and did not allow the consumer to cancel with 30 days’ notice and pay a moderate sum in compensation.

The ruling only applied to Ashbourne, but the OFT warned at the time that it would have wider implications for the whole gym industry.

“We are clamping down on this [unfair terms in gym contracts],” said Nigel Cates, a director in the goods and consumer group at the Office of Fair Trading. “We have already given gyms six months to look at their contracts after the Ashbourne ruling last year. We are now following that up. We don’t want any of the same circumstances to happen in other gyms.”

The OFT said that it received about 1,500 complaints about gyms in the four-month period to December 2011. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds