Gym contracts face fairness scrutiny

Gyms around New Zealand have received a warning from the consumer watchdog over unfair conditions in their contracts.

The Commerce Commission reviewed 10 standard gym contracts and found a number of potentially unfair terms including gyms not being liable to customers if their property is damaged or lost, and provisions allowing the gym to vary their location and services.

A number of the contracts were also not written in plain English and contained complicated cancellation policies.

The Fair Trading Act bans contract terms that create a significant imbalance of rights or obligations between companies and consumers.

Commissioner Anna Rawlings said there were many consumer complaints about gym contracts, with more than 700,000 Kiwis belonging to a gym.

‘‘We’re satisfied with the response from gyms to our concerns, with all providers demonstrating a desire to comply with the law, either justifying how the terms are necessary to protect their legitimate business interests or agreeing to amend their contracts,’’ Rawlings said.

‘‘For some it prompted a complete rewrite of their contracts. We’re particularly pleased to see gyms amending their termination clauses and associated fees.

‘‘This includes some gyms reducing their 30-day notice periods for cancellations outside any minimum term down to between seven and 14 days.’’

‘‘Some gyms also changed terms relating to their liability to members, and variation clauses about their location and the services they offer.’’

The commission provided compliance advice letters to all gyms involved in the review reminding them of their obligations under the Fair Trading Act.

It also encouraged gyms not involved in the review to consider their contracts in light of the report.

The gyms reviewed were Anytime Fitness, City Fitness, Club Physical, Configure Express, Jetts, Les Mills, Next Generation, Snap Fitness, and Loft 45.

Gyms are the third sector to be reviewed by the commission, following reviews into retail telecommunications and energy contracts.

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The Commerce Commission says a number of contracts make gyms not liable for damage to or loss of customers’ property.