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27/6/11
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July 2011
The UK’s No 1 fitness industry magazine
Gym owners warned over contracts GYM owners have been warned to check the terms of their membership contracts following a court case which labelled some contracts ‘unfair and unenforceable’. The Office of Fair Trading took action against Ashbourne Management Services, which draws up agreements and collects membership payments on behalf of over 700 clubs. A High Court ruling said minimum contract length terms and other key terms in thousands of gym membership contracts, recommended and enforced by Ashbourne were unfair and unenforceable. It also ruled Ashbourne's techniques for collecting arrears were unlawful, as in many cases consumers who had stopped using the gym could not terminate their membership. If consumers stopped paying, Ashbourne demanded immediate payment of the full sum for the whole minimum period and in some cases threatened to refer the debt to a credit reference agency. The court ruled Ashbourne’s business model is ‘designed and calculated to take advantage of the naivety and inexperience of the average consumer using gym clubs at the lower end of the market', and the minimum period is 'a trap
into which the average consumer is likely to fall’. Thirteen of Ashbourne's contracts were considered and the minimum terms in 10 of them were said to be completely unfair. The last three, which Ashbourne had created since the OFT began court proceedings in March 2010, were considered fairer to consumers, but may still be unfair if they tie the consumer in for more than 12 months. Director in the OFT Goods and Consumer Group Jason Freeman said: “We have received many complaints about Ashbourne's contracts, and many consumers have felt pressured into paying sums of money that they believed they did not owe. Unfair terms that unreasonably bind consumers into long contracts they cannot leave, and heavyhanded collection techniques, have no place in businesses' dealings with consumers. “This ruling should help traders to understand where the boundaries lie, and sends a warning that if they cross the line, the OFT and local trading standards services can take action.” For more on this story and to hear Ashbourne Management Services’ response see Page 8
No 214 £3
Industry maintains market value – FIA report
A new fitness class has been launched by Gymbox which helps members achieve the celebrity bum of their dreams. The six-week ‘Yummy Bummy’ workouts have been split into four different classes, with each one focusing on achieving the look of a different star. Participants can choose from Kim Kardashian (pictured), Kylie Minogue, Beyonce or Pippa Middleton who were named as having the best celebrity bums in a member survey. Full story, Page 6
THE UK health and fitness industry has maintained a total market value of £3.81b, its first flat annual performance in 10 years, according to a report. The 2011 FIA State of the UK Fitness Industry report indicates a small dip in membership levels and a small net loss of fitness facilities. But growth was driven by good performance from public fitness operators, with 20 new sites opening and a growth in market value of 5.8 per cent. Key facts included: Total market value is sustained from 2010 and up four per cent since 2008. Total membership base has seen a 0.3 per cent decline to 7.3m over the past 12 months; but this is a two per cent increase since 2008. 149 new public and private fitness facilities opened in the 12 month period ending March 31 2010, up from 122 in 2010. 125 public and private fitness facilities closed in the reported period. There are now 5,852 fitness facilities in the UK; down from 5,885 in 2010 and up 1.7 per cent since 2008.