For years, the OFT have been keeping a close eye on health and fitness clubs with specific reference to the fairness of their gym membership contracts. Typically, consumers have been required to sign agreements which commits them to a 12 month minimum term, which absolutely ties them in to making the monthly payments for that period. Many consumers have complained that gyms will not release you from this obligation under any circumstances, even in cases of serious illness, redundancy or relocation. Other complaints relate to long notice periods for cancellation and disproportionately high cancellation penalties.
The OFT have focused on the following aspects of contracts for gym membership:
- Claims that gyms will not be liable for death or personal injury, or for loss or damage to property
- Lack of clarity concerning minimum membership periods and notice required for cancellation
- Lack of clarity concerning cancellation charges, or the consequences of cancellation
- Clubs permitting themselves to make changes to their service agreements with you
In addition, the OFT felt that many of the obligations and requirements of the consumer were hidden within complex legal language when they should have been more plainly and clearly expressed. And while gyms could be allowed to impose an initial 12 month minimum term, consumers should be in no doubt on reading the contract that this would be the case. What about long notice periods for cancellation? A three month period is commonly the length of time required, which may seem unfair as it then ties you into a further 3 monthly payments. The OFT recognise that gyms also need to protect themselves from sudden cancellation and don’t consider 3 months to be excessive where you have a ‘rolling’ membership (i.e. not a minimum term contract). However, as with the imposition of a minimum term, this must be plainly and clearly expressed in the contract.
So what is an unfair term and what just bad customer service? We have seen that some of the points above, although dubious are not necessarily unlawful. However, the following are are unfair terms and have been recognised as such as a result of the OFT’s investigation:
- Limiting or excluding liability for death or injury, or for damage or theft of property (includes ‘at your own risk’ disclaimers)
- Excluding liability for any breach of contract on the club’s part, even though you are obliged to fulfil your contractual obligations
- Limiting your ability to take legal action against the club if they don’t comply with their contractual obligations
- Excluding certain statutory rights such as your right to get a refund if the club is unhygeinic or unsafe
- Financial penalties on cancellation, where this sum is disproportionately high. Loss of all monies paid in advance may also be unfair, where this cannot be justified by the gym
- Allowing the gym to terminate or cancel the agreement without reasonable notice, legitimate cause (as per contract), and giving you the same rights.
- An initial minimum term is permissible, but where this includes an automatic renewal to another fixed term, this is likely to be unfair. Similarly, automatic renewal without giving you reasonable opportunity to cancel is unfair.
In addition to the identification of unfair clauses, the OFT recognise that you may not have had the opportunity or the know how to read and fully understand the contract you are asked to sign. Consequently, contracts are required to be written in plain and intelligible language with a prominent warning that the member should read and understand the terms before signing them.
Despite the interest of the OFT, the situation still calls for buyer beware, and care should be taken before entering into such agreements. Bear in mind the following points, because there is no cooling off period!
- Take the time to read through the Ts and Cs. Take it away if necessary – it is your right to have reasonable opportunity to familiarise yourself with the contractual terms before signing.
- Take particular note of clauses in relation to tie-ins, notice periods and cancellation penalties. Do not mistake the notice period for cancellation with the length of the contract.
- If the contract contains clauses which refer to automatic membership renewal, ask for this to be removed, or make a note of the date by which you should inform them.
- By law, the contract must be presented in simple, jargon-free language. if you are unsure about anything ask for full clarification
- A contract is a two-way process. Don’t be afraid to ask certain clauses to be struck out if they seem unreasonable or you are not happy.
- Take extra care with introductory offers and special deals. Clubs may waive their joining fee but still charge you the equivalent as an ‘admin’ fee. Always read the small print.