Gym contract traps: Exercising your right to protect yourself

My inbox tells me that gym memberships are a minefield for consumers; so many ways for us to get into financial trouble, and sadly lots of unscrupulous gyms and gym salespeople waiting to take advantage of our desire to get fit and shed weight.

Here’s a typical case, which I received this week:

"In December 2014, my fiancee was approached by gym sales consultants who lured her into signing for a gym contract without really explaining the fact that she will have to pay a 60% cancellation fee for the remainder of the contract months. We used the gym for some time and the money was being debited from her account.

“After my fiancee's mother passed away, we went into debt and could not afford to continue with the gym payments.We went to the gym where we informed that we could cancel on condition that we pay 60% of remaining subs, which at the time added up to over R4000 - money that we did not have, considering at the time we could not sustain a gym debit of R440. So my fiancee changed her bank to avoid the continuous debit order deduction by the gym.

“Recently she was contacted by some debts collecting company demanding she pays R5900. Failure to comply will lead to black listing.

“Is this legal? Are the ambush sales people allowed to lure people at malls and entice them to sign contracts without fully explaining?”

Reading the contract

It’s a really bad idea to contract with a company based on what a salesperson tells you - there’s no proof they misled you. You must read the contract - every word of it. And if you don’t look beyond the amount that you are going to pay per month, you’re asking for trouble.

Few of us go into a contract believing that we’re going to want to back out of it, but when it comes to a gym contract, you should, you really should..!

A lot of people to commit to one, two or three year gym contracts, and then stop going fairly soon afterwards. And here’s the thing - even if you aren’t using the gym, you are still legally obliged to pay. There’s no cancelling the contract and walking away free of financial obligation to the gym.

Many people are told by gym salespeople when they are approached to sign up that they can cancel any time, which is true, but what they seldom spelt out is what it will cost members to cancel. Yes, you can cancel, but the gym can, in terms of the Consumer Protection Act, charge  a “reasonable” cancellation penalty.

So what’s “reasonable”? Well, the trouble is, it’s different things to different gyms. For Virgin Active it’s 30% of your remaining subscriptions. Planet Fitness’ is 40%. But I’ve seen contracts where the penalty is 60 or 70%, which is ridiculously high. So when you’re presented with a gym contact, look for the cancellation penalty clause, and see what their idea of “reasonable” in terms of an early cancellation penalty. Be wary of signing up if it’s more than 40%.

Another thing - fixed term contracts don’t just “die” at the end of the term - as many consumers assume - they roll over to month-to-month contracts unless you give a month’s written cancellation in writing. That’s also in the contract, unread by many. But the companies can’t have it all their way.

The contracts can’t automatically roll over at the end of that ‘initial” period - the gym must notify the member between 40 and 80 days before expiry and explain their options - what they need to do to cancel or what the new terms will be if they don’t. If you did not get that notification from your gym and the debit order remained active, demand proof that you were sent that notification. If they can’t provide it, or the notification didn’t spell out when and how you had to cancel, the company is obliged to refund monies taken after the contract expiry date.

If they refuse, lodge a complaint with the Consumer Goods and Services Ombudsman.

What to look our for

And finally, always opt the shortest possible term with gym contracts - that’s usually a year - even if the monthly sub is slightly higher.

Don’t be fooled by the “it will work out so much cheaper if you pay for a 36-month contract upfront” line - what the salesman deliberately doesn’t tell you that any monthly savings are totally wiped out by the horrendously high interest you’re going to be paying on your “budget” credit card account.

Pay very close attention to the number of months which the salesman hand-writes in the contract term section of the contract. I’ve had a lot of people tell me they thought they were signing up for 12 months but when they looked at the contract they’d signed afterwards, it was for 24 or even 36 months.

And always insist on being given a copy of the contract you signed, so if they change that number of months later, you have proof. Take a photo of the form, if  you have to. There’s a lot at stake - take the trouble to protect yourself.