Heavy Debits

Sydney Morning Herald

Wednesday February 14, 2001

Christine Long.

Gyms can be surprisingly inflexible when it comes to cancelling your membership, writes Christine Long.

Several weeks after joining a gym, a Sydney woman lost her job and was no longer able to afford to meet the direct debit payments on her two-year membership. It was at that point that she found out just how inflexible gym memberships can be.

Letters to the management didn't seem to help and eventually she called in her solicitor. As it turns out, the gym was on the brink of collapse and the new owners have now stopped deducting direct debits from her account.

But for consumers who prepay for gym use or enter into one- or two-year membership agreements, the ending is not always so rosy.

Many fitness centre contracts will not allow people to cancel a direct debit payment simply because they have second thoughts, move house, change jobs or decide they were more comfortable as a couch potato after all.

Unless you have a medical certificate supporting claims that you have temporary or permanent disability, most requests to stop a membership midterm are likely to fall on deaf ears.

Some gyms will allow members to transfer or cancel a membership contract, but it may be permitted only after the membership has been held for a minimum term and a fee may be charged for the privilege.

This can be particularly bad news for the great majority of us who exercise in a burst of enthusiasm for about six weeks and then find any excuse possible to avoid going to the gym.

According to the Pure Health Web site, only 20 per cent of people who take up a physical activity are still persisting with it a year later.

Happily, some forthcoming developments will offer some protection to consumers concerned about losing money through inflexible gym membership contracts and gym closures.

Legislation expected to take effect on March 1 will make it illegal for gyms to accept more than 12 months' membership fees in advance.

Any prepaid membership offered must also be less than the remaining lease on the fitness centre premises, unless it can be proved that the consumer has been informed of the situation.

And gyms selling memberships before opening will be required to put all money into a trust fund until their doors open.

John Watkins, the NSW Minister for Fair Trading, says the changes have been introduced to protect consumers after many lost thousands of dollars paying for gym memberships up to three or five years in advance.

"Unfortunately, too many consumers found their gym expired before their membership did," Watkins says.

The legislation should add some teeth to the protection already offered by the voluntary code of practice introduced by fitnessnsw, the representative body for the State's fitness industry, in March 1998.

Among other things it stipulates that gyms should include the cost of all fees in their membership agreements; all members should be offered a monthly billing arrangement; and any minimum term on the arrangement should be clear.

According to the Office of Fair Trading, banks must give you a refund if you tell your gym to cancel a direct debit and an additional deduction is made.

The code, which is binding on the association's 100 members, also specifies consumers should have a seven-day cooling off period when they sign an agreement for three months or more. The problem is that only a quarter of the 400 fitness centres in NSW are known to be adhering to the code.

Ian Grainger, the chief executive of fitnessnsw, says he would like to see the voluntary code made mandatory to give consumers even better protection.

"There is a small number of operators out there that do concern us and we'll continue to do what we can in those areas to educate the public," Grainger says.

So what can you do to avoid losing money on a gym membership?

* Check the fitnessnsw Web site (www.fitnessnsw.com.au) to find a gym that adheres to the voluntary code of practice. That way you can be certain you will get a full explanation of the terms and conditions in the agreement.

* Read the fine print carefully. In particular, take note of clauses on cancellation charges, transfer conditions, the length of the membership and situations in which you could freeze the agreement.

* Take out a month-by-month membership. These are particularly useful for people who think they may move house or office, go through busy periods at work or simply take up a different form of exercise with the change of season. Although the monthly payment is likely to be higher than those on a pre-paid 12-month contract, usually only 30 days' notice is required to cancel a direct debit arrangement. Month-to-month memberships are also cheaper than paying on a casual basis for the same time.

* Look for in-built flexibility. If you know you may be moving, opt for a membership that allows you to visit more than one gym in the chain. Fitness First has a "passport" membership that entitles you to use any of its 150 gyms worldwide.

* Try before you buy. Often gyms will give free day passes to prospective members so you can use the facilities before taking out a membership. And take full advantage of any cooling-off period offered. If you have any doubts about staff, service or facilities, cancel before it starts to cost you money.