Consumer Watch

Wendy Knowler fights for your rights...

Wendy Knowler masthead
September 26 2011 at 12:02

I’ve been a consumer journalist long enough to remember the days when fitness clubs signed people up for lifetime gym memberships –  paid upfront in a lump sum – and then closed their doors fairly soon afterwards.

That practice was outlawed back in 2002, restricting gym contracts to no more than three years in duration.

In April this year, that law was superseded by the Consumer Protection Act, which limits fixed-term contracts to no longer than two years.

But there’s a “but”. In terms of the CPA regulations, if the consumer agrees, and provided  “the supplier can show a demonstrable financial benefit to the consumer”, consumers can commit to contracts of longer than two years.

And that puts consumers at risk, not only if the gym closes down during their membership term, but if they choose to cancel early for whatever reason.

Two Mondays ago, members of two Durban Curves clubs arrived at the doors as usual to find them locked, with a notice proclaiming that the gym was closed “due to unforeseen circumstances”.

Most had paid their September subscriptions via debit order, and the staff, who had also been taken by surprise, hadn’t received their salaries.

The clubs, Westville and Musgrave, were owned by the same franchisees, Stephen and Kate Brown.

“It’s insane,” said Sameeha Akoon, a member of Musgrave Curves and more recently the Westville club, for the past four years. “One minute there’s a fully fledged gym, and the next it’s closed and cleaned out, without any explanation.”

Curves Africa, the franchisor of about 100 Curves gyms around the country, and part of the global women-only fitness club empire, was also thrown a curve ball.

Clive Robinson, who heads up the Master License in South Africa, said despite his office’s regular communication with the Musgrave and Westville branches, “shockingly and unbeknown to us the owners of those clubs made a unilateral decision to close them on the morning of September 12”.

The franchisor’s attorneys were instructed to make contact with the Browns to “force them to reopen”, but this didn’t happen.

“They filed for bankruptcy, which affected both businesses,” Robinson said.

“It seems they have cut all contact, and we are battling to get hold of them.”

The closure came as a shock as the clubs were both performing well, he said.

So where does that leave the estimated 400 affected members?

Robinson said they could transfer their memberships to the Curves club nearest them at no extra cost, but many members I spoke to said it didn’t suit them to travel to a different suburb for their 30-minute workouts.

Most will probably go for the second option – cancelling their memberships with no penalty charges.

Robinson said Curves Africa had instructed the deduction agency not to deduct any further subscriptions from the affected members’s accounts.

According to the Banking Code of Practice, a customer may instruct their bank to reverse a disputed debit order if it’s reported within 40 days of it appearing on their account, and the banks are obliged to reverse it immediately.

So those members whose September Curve subscriptions had “gone off” their accounts have a remedy there.

Incidentally, some bank employees can be less than obliging when asked to reverse a disputed debit order within 40 days, at which point it’s advisable to approach a manager and mention the Code of Banking Practice.

There’s another potential danger for members of gyms which close without warning: being subsequently hounded for payment of the remainder of their contracts.

When the company which owned the Health & Racquet Clubs went into liquidation about 10 years ago and all the branches closed suddenly, the affected members naturally cancelled their debit orders, despite their contracts committing them to paying their subscriptions until the end of their membership term.

Debt collectors who’d acquired that company’s “debtors’ book” later began harassing the former members to pay alleged arrears, plus costs and interest.

Unbelievably, many of those former members are still being harassed for alleged arrears, despite the fact that even if they had owed the money, the debts would have prescribed long ago.

Many have buckled under the pressure and paid up to be free of the threatening SMSes and letters.

So, the moral of that story is members of gyms which close down, leaving them without any means of benefiting from their memberships, must obtain some documentary evidence of the fact that they are not liable for any further subscriptions, should anyone later demand unpaid fees.

Robinson said Curves Africa was willing to provide the affected members with such a letter, but as the franchisees held the contact details for their members, he didn’t have these details.

So if you are among those affected, contact Curves Africa to discuss your options and arrange for that letter, if you’re cancelling.

E-mail them at support@ curvesafrica.co.za.

Guess what? Now you belong to another club

Roy Haycock, 82, of Fourways contacted Consumerwatch, unhappy about being told the gym he joined in March last year had closed.

Haycock had joined Body Lab in the Olivedale shopping centre, paying R5 904  for a three-year membership.

He was naturally none too pleased to learn from April this year, he had to see out the remaining two years of his membership at the Fitstop gym in Bromhof, Randburg – according to him about 10km away.

“I told Body Lab it doesn’t suit me to travel the extra distance on a busy road, and as a pensioner, I cannot afford the extra fuel charges.

“But they said the only thing I could do was sell the balance of membership – I’d have to pay R350 to cancel and the new member would have to pay a R350 joining fee. Please help, Wendy – I want them to refund my money.”

A few other former members of the Body Lab in Olivedale have posted similar complaints on the HelloPeter website.

“I signed a contract with Body Lab in Olivedale which was right around the corner from my house,” posted “Franna” last week.

“After some months they decided to close down and move my account to Fitstop, which is a good 10km further, without my consent!

“They started debiting me and since the gym was simply too far away, it is not viable for me to attend anymore. I never ever signed a contract with Fitstop – my contract was with Body Lab. Now Fitstop wants to blacklist me for non payment.

“How can a gym close down and then just transfer all the accounts down the road and expect all the members to be just fine with it?”

Asked whether the Body Lab contract which Haycock signed entitled Body Lab to transfer his membership to another gym, the company’s legal manager, Nico Grobler, said: “It is the contention of these offices that the Body Lab Group did not contravene any of its obligations regarding the terms and conditions of the agreement.”

A decision was taken to close the Body Lab’s Olivedale branch because it was no longer viable, Grobler said, and in consultation with the Department of Trade and Industry, it was decided to accommodate the 2 000 affected members at Fitstop in Bromhoff, as it was the nearest gym.

Grobler insisted it was only 5km away from the Body Lab in Olivedale, not 10.

While the move affected some members negatively, he said, others had benefited, and very few complaints had been received.

No refunds would be issued.

I suggested this was yet another example of why it’s a bad idea to sign a long-term gym contract with an upfront payment.

Grobler agreed.

Apart from the threat of your chosen gym closing down during the term of your contract, if you choose to cancel before the term is up, in terms of the CPA, the gym is entitled to charge |a “reasonable” cancellation penalty.

And, naturally, companies have varying interpretations of the word “reasonable”.

For example, Virgin Active’s penalty is 30 percent of remaining subscriptions, while Planet Fitness’s is 40 percent.

Of course, the longer the term you’ve signed up for, the higher the cancellation fee will be.

Grobler said the Body Lab group had since last year moved away from upfront payment deals paid in cash or by credit card, to monthly debit orders.

“People know they can cancel their agreement in terms of the CPA, and they can then cancel the debit order,” he said.

Bottom line – sign up for the shortest possible period and avoid making advance payments, no matter how attractive the “discount”.

In any event, apart from the risk of gym closure, the monthly interest charges on the “budget” facility often cancel out any subscription saving.

What Planet are you with?

Two years ago, Jessica Levitt signed a three-year contract with Planet Fitness’s Village Walk branch in Sandton, and was told in August that it was to close last Friday.

“I wanted to gym there specifically because it’s so close to work, but if I cancel my contract, I’ll have to pay a penalty of 40 percent of remaining subscriptions,” she said. “I have been offered a so-called ‘special’ rate on a Platinum membership – ‘only’ R300 more a month!

“When I signed the contract, they said that should the branch close I would be able to cancel the contract, but that turns out not to be the case.”

Responding, Corin Baker of Planet Fitness said the company had been forced to close the gym because the centre owners were to embark on a massive revamp during the course of three years.

“As a result, all Planet Fitness Village Walk ‘house’ members will be upgraded to national members, at no charge, giving them access to Rivonia, Wanderers, Rosebank and Craighall to name a few branches, and also allowing them use of Planet Fitness while away on holiday or business in South Africa.”

In addition, she said, they’ll get two months’ free membership of the Platinum branch – situated opposite the Village Walk branch – at no charge.

“Planet Fitness Platinum is one of the most sought-after health clubs in the country, and a big step up in their gyming status,” Baker said.

In other words, if Levitt wants to use the Platinum gym, due to its proximity to her workplace, for the remaining year of her contract, she must expect to pay extra after those two freebie months.

 

 

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