Friday, 27 May 2011

Gyms trapped members in contracts

The High Court has ruled that 300,000 people who signed up for gym memberships were trapped in unfair contracts.

The membership agreements tied them in for up to 3 years, even though many members stopped attending after 3 months.

These gym contracts played on people's sometimes short-lived enthusiasm for exercising.

A new gym member might sign up on a monthly rate, lose interest after a couple of months but then be told that if the payments were stopped a bill for as much as a thousand pounds would be issued for the remainder of a 3 year contract.

The Office of Fair Trading, which brought the case, was targeting 700 smaller gyms which use a contract and payment collection service from a specialist firm, Ashbourne Management Services.

The ruling says many of the contracts were unfair, and it criticises the company for threatening legal action and reporting non-payers to credit reference agencies.

Ashbourne says it has now changed its contracts.

But the Office of Fair Trading believes the High Court has strengthened its hand against unfair terms, so that all businessses will have to check whether they are forcing customers to sign up for too long.

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