Potential unfair gym contracts under investigation by OFT

The Office of Fair Trading (OFT) stressed that its investigation into companies that operate or manage gyms, was at an early stage and did not name any of the companies involved.

"It should not be assumed that the parties involved have breached any consumer protection legislation. The OFT will not reach a view until it has completed its investigation," The regulator said in a statement.

The investigation follows an enforcement order granted to the OFT by the High Court against Ashbourne Management Services Ltd (AMS), a gym management company, in August last year. The order prevents AMS and its directors from recommending, using or relying on certain unfair contract terms and prohibits a number of its debt collection practices which the Court said amounted to unfair commercial practices.

The OFT began legal proceedings against the company after receiving a "large number" of complaints from customers with gym memberships managed by AMS, who had been unable to cancel lengthy membership contracts drawn up by the company.

"This judgment provides useful guidance to other businesses in the health and fitness club sector which use similar contract terms. The OFT expects businesses using terms similar to those which have been held to be unfair to amend their contracts accordingly, and to refrain from enforcing unfair terms in existing contracts," the OFT said in its statement.

Although the High Court's ruling only applied to AMS, in a press release issued at the time the OFT suggested it would have wider application. It urged gyms to check their contract terms to make sure they were lawful and whether they needed to notify their customers of any changes.

Under the Enterprise Act, the OFT has the power to investigate particular markets to see whether they are working well for consumers. Following an investigation the OFT can refer a market to the Competition Commission, undertake enforcement action or make recommendations to Government.

Trade body the Fitness Industry Association (FIA) said that it would meet with the OFT's investigation team later this month. Chief executive David Stalker said the FIA "strongly believed" in following the regulator's rulings, and was happy to play an advisory role in any investigation.

"The FIA's vision, to get more people, more active, more often, is shared by our members who offer a wide variety of membership options to suit individual budgets and training needs; placing consumers at the heart of their offering and motivating people to lead an active lifestyle," he said.

Earlier this week national gym chain LA Fitness caused outrage on social networking site Twitter after refusing to cancel the contract of a customer in financial difficulties. The Guardian newspaper's 'consumer champion' column published a letter from the customer, HB, who was seven months pregnant and whose husband had lost his job. LA Fitness ultimately apologised and agreed to waive all remaining charges.