Major gym chains have been told to get rid of unfair terms in their consumer contracts, following a Commerce Commission review.
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The Fair Trading Act bans unfair terms. However, our 2016 review of gym contracts found they can be peppered with terms that risk breaching the Act.
Many contained clauses that attempted to limit or exclude the gym’s liability for problems.
Others allowed the gym to unilaterally vary its services or imposed lengthy notice periods for a consumer to end a contract.
Commerce Commissioner Anna Rawlings says it’s now sent compliance advice letters to gym operators, advising of their obligations under the Act.
Gyms named by the commission are:
The review also looked at Debitsuccess’ standard contract, which is used by smaller gyms.
“Our review identified a number of potentially unfair terms across the contracts. These included onerous liability provisions where gyms’ tried to exclude all liabilities to customers for damage or loss to members’ property, as well as provisions allowing the gym to unilaterally vary their location and services,” Ms Rawlings said.
As a result of the review, terms giving gyms wide-ranging rights to vary their services and limit their liability to members have been amended, she said. Some gyms have also reduced their 30-day notice periods for cancellations down to between 7 and 14 days.
The ban on unfair terms in standard form consumer contracts took effect in March 2015. The Act defines a terms as unfair if it creates a significant imbalance in rights between the company and the consumer, is not reasonably necessary and would cause detriment if relied on.
However, our research has found some industries have been slow to respond to the law change.
Find out about our Play Fair campaign and your rights to challenge unfair terms.