Gym Membership Contracts Ruled On

The Office of Fair Trading recently pursued a company that collected payments on behalf of over 700 gyms, which resulted in a ruling of many terms of gym membership being deemed unfair and unenforceable.

On 31 May 2011, the Office of Fair Trading announced that the High Court had decided that key terms in gym membership contracts, including certain minimum contract length terms, were unfair and thus unenforceable. The contracts had been recommended and enforced by Ashbourne Management Services Limited, and the OFT reported that a number of the collection techniques employed by the company were also ruled unlawful.

The High Court ruled that any gym contract that tied a consumer in for longer than 12 months was unfair. The OFT also requested the Judge rule against Ashbourne reporting or threatening to report members to credit reference agencies, where:

- the term requiring payment is unfair;
- the money demanded is not actually owed or is simply a claim for damages;
- consumer has a genuine reason for disputing their liability to pay.

Geoff Kew

Published on 03/06/2011