Investigation into health and fitness clubs contracts

Start date: 31 January 2012
Case reference: MP - G & C/0004

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Summary of work

The OFT has opened an investigation under the Enterprise Act 2002 into a number of companies that operate gym and fitness club chains or who provide management services to gyms. It is considering whether these companies are using or recommending unfair contract terms in breach of the Unfair Terms in Consumer Contracts Regulations 1999 and/or are engaging in any unfair business practices under the Consumer Protection from Unfair Trading Regulations 2008.

The investigation is progressing but the OFT will not announce a final view on whether the law may have been infringed until it has completed its investigation. It should not be assumed that the parties involved have breached any consumer protection legislation.

This investigation follows the enforcement order the OFT secured from the High Court in August 2011, which prevents Ashbourne Management Services Limited (AMS), a gym management company, and its directors from recommending, using or relying on certain unfair contract terms and prohibits a number of its debt collection practices which amount to unfair commercial practices.

This judgment provides useful guidance to other businesses in the health and fitness club sector which use similar contract terms. The OFT expects businesses using terms similar to those which have been held to be unfair to amend their contracts accordingly, and to refrain from enforcing unfair terms in existing contracts.

Following the AMS court ruling, the OFT issued a press release advising other gyms to check their contract terms to ensure they were not using similar unfair terms and/or business practices.

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April 2012

The OFT has now closed its investigation into Virgin Active Limited. During its investigation the OFT did not find any evidence that Virgin Active was using contract terms or business practices found to be unfair by the High Court in the AMS case. The OFT has worked with Virgin Active to make  some changes to its terms and conditions. Virgin Active will extend the period during which members who are made redundant may give notice to end their membership from one month to two months, and extend the ability to cancel membership following loss of employment to those who lose their job in circumstances other than redundancy. Virgin Active has also agreed to reduce the notice period for members on legacy Esporta 24-month contracts from three months to one month. Virgin Active is also making some revisions to the standard debt collection letters that third parties acting on its behalf will use. Virgin Active has fully co-operated with the OFT's investigation.

The investigation continues into other companies that operate gym and fitness club chains or who provide management services to gyms.

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March 2013

The OFT has announced that it has secured undertakings from Bannatyne Fitness Limited, David Lloyd Leisure Limited and Fitness First Clubs Limited to make improvements to their standard contract terms and associated business practices.

• Press release Three gyms improve contract terms following OFT action (8 March 2013)

The OFT continues to investigate some other companies that operate gym and fitness club chains or who provide management services to gyms and expects to provide an update on these cases in the coming months.

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Related documents

• Press release: OFT secures High Court order to stop unfair gym contract terms (9 August 2011):
• Investigation into Asbourne Management Services

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Contacts

If you have any information you feel is relevant to the investigation and want to contact the OFT, please write to:

Gym Contracts Investigation
Floor 7C
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX

or email: gymcontracts@oft.gsi.gov.uk.

Team leader: Debbie Kitcher-Jones (020 7211 8997, debbie.kitcher-jones@oft.gsi.gov.uk)

Project Director: Jennifer Halliday (020 7211 8435, jennifer.halliday@oft.gsi.gov.uk)

Senior responsible officer: Cavendish Elithorn (020 7211 8170, cavendish.elithorn@oft.gsi.gov.uk)

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Media enquiries

Any media enquiries should be directed to a member of our Press Office.

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