After receiving numerous complaints about unfair gym contracts, Australia’s largest and most trusted consumer organisation CHOICE, sent two shadow shoppers into the major fitness chains to investigate claims of aggressive sales tactics, elastic pricing, confusing contracts and overcrowded classes. Australian Women Online is able to offer our readers a first look at the CHOICE report on unfair gym contracts ahead of it’s official release this Sunday, 3 May 2009.
Everyday hundreds of Australians front up at gyms across the country only to find themselves pressured into signing 12 month membership contracts. But despite what the gyms would have us believe, these contracts are not set in stone and consumers do have rights, including the right to cancel a gym membership.
Pressure to Sign Gym Contracts
CHOICE has received complaints about the aggressive sales tactics used by gyms to recruit new members. To get an insight into what a typical consumer might encounter when they front up to a gym, CHOICE sent two shadow shoppers separately to nine gyms around Sydney – a total of 18 gym visits. They visited two gyms each from Fitness First, Contours, Fernwood and Curves in two different socioeconomic areas, as well as the new Virgin Active gym.
“Neither shadow shopper who visited the Virgin Active gym or the two Fernwood gyms felt any pressure to sign up immediately. While one reported slight pressure to sign on the spot at one of the Contours and one of the Curves gyms, our shadow shoppers were unanimous that nothing rivaled the heavy sales tactics encountered at Fitness First.”
A salesperson at one of the two Fitness First locations visited by the shadow shoppers was singled out for his high pressure sales tactics. “He couldn’t believe I didn’t want to sign,” reported one of the shoppers. “When I said I needed to speak with my husband, he said, ‘I thought you said he was supportive of you being here’. He said it was only $35 today and if I go it may not be available when I call back.”
The second shadow shopper said: “He just kept asking me what the problem was.”
CHOICE found that most gyms insist on a sit-down interview with potential customers to gauge their goals and expectations. When CHOICE asked Dr Paul Harrison, a consumer behaviour specialist and senior lecturer at Deakin University, to comment on this issue he said: “Gyms want to develop a personal relationship with you – you are emotionally vulnerable and by sharing goals and aspirations it can feel like a relationship. Don’t be fooled into thinking it’s anything but fiscal.”
CHOICE found that all the gyms visited took a ‘creative approach’ to pricing. It would appear gyms vary their pricing structure to reflect what consumers in the area can afford to pay.
“Our shadow shop revealed that while both Curves and Contours had consistent pricing across their outlets, there were variations in what was waived or charged in terms of joining and administration fees. One Curves outlet quoted a joining fee of $30, while at another it was $199 but a $99 discount was offered.”
“Fitness First National Operations Manager, Michele Harding, concedes the pricing structure varies from club to club, depending on customer demographics and location. Fernwood Sales Manager, Jo Stagg, says prices across the Fernwood network also differ depending on location, as franchise owners set their own prices.”
Gyms are also prepared to negotiate on the price of such items as joining fees and administration fees to lure consumers into signing gym membership contracts on the spot.
“At a Contours gym, one of our shadow shoppers was quoted a “set-up” fee of $195 for a 12-month contract which was reduced to $95, then an “admin fee” further reduced to $45 during the consultation. At the same gym, our other shopper was told this joining fee would be waived totally if she joined before a certain date. At the second Contours gym, a set-up or administration fee was not mentioned to either shopper and they were both told that the “joining fee” would be waived if they signed a 12-month contract.”
Cancellation of a Gym Contract
The two shadow shoppers reported that few of the salespeople at the 18 gyms visited had volunteered information about how to cancel a contract. Virgin Active and Fernwood provided the most thorough information about cancellation. Whilst Curves and Contours volunteered some information, the sales staff at Fitness First did not volunteer any information on cancellation of a contract.
Whilst consumers should be able to cancel their membership contract over the phone, the reality is somewhat different. Most gyms will insist members have a face-to-face meeting with a salesperson who will then make an attempt to talk the consumer out of cancelling their contract.
CHOICE says making it difficult for consumers to end a gym membership after the initial contract period is unfair. “New federal unfair contracts legislation, due to be in place for 2010, may help where the problem is a harsh cancellation clause, otherwise it’s unlikely that these laws will stop unfair practices designed to prey on consumers’ ignorance of their rights and other problems endemic to the industry – namely, pressured sales tactics and arbitrary pricing”
Carolyn Bond from the Consumer Action Law Centre says it may take time for the new laws to effect change. “Gyms have been a problem for years,” she said. “Unfair contract terms should prevent some of the problems we see, but some problems are due to a bad culture within some of the industry. Some businesses appear prepared to do whatever it takes to keep consumers trapped in their contracts.”
So perhaps for the time being at least, consumers will have to be vigilant when fronting up to their local gym and be prepared to walk away if they feel any pressure from the salesperson to sign a contract on the spot.
The CHOICE report will be released on the consumer organisation’s website www.choice.com.au this Sunday, 3 May 2009 and will include information on your rights in relation to gym contracts and where to get help.
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