Five gym problems - and how the disputes tribunal rules

Gym chain City Fitness has been in court fighting claims from the Commerce Commission that the way it promoted its membership fees was misleading.

It did not advertise a compulsory transaction fee.

But it is far from the only gym that has been in dispute with its customers.

Consumer NZ says it's a topic that comes up frequently in inquiries, and disputes tribunal judgements show many gymgoers have sought resolution to their gym-related concerns.

Here are five ways that gyms and gym-goers have hit trouble.

'Cancelled' direct debit went on for years

In one case, a man signed up to a contract with a gym in 2014. The next year, he gave notice to cancel and was told there were outstanding charges to clear first, of $23.26.

He told the Disputes Tribunal he thought he had paid them and the contract had been cancelled. But the gym continued to deduct fees by direct debit until 2023. The man wanted a refund of what he paid between 2017 and 2023, which amounted to $3793.89.

The tribunal referee said the correct interpretation of his contract was that when someone gave notice to cancel, their membership would cease after 30 days.

"I do not accept … evidence that [he] could not cancel his contract if he was in arrears because if for example [he] had arrears which he brought up to date within the 30 day notice period but then fell into arrears again, following [the] logic, [he] would need to bring the account up to date again and give another 30 days notice which I find is not what the contract provides …and would be an absurd outcome.

"[The gym] should have cancelled his contract on 19 January 2018 and he should not have been charged any more fees after that date."

The gymgoer was handed a total of just over $3400, split between the former franchisee and the current owner. The referee said the current owner could have done more to chase up inactive memberships, but the breach of the Consumer Guarantees Act lay with the former owner.

Classes change

A woman who joined a gym in 2021 and paid $2330 for a year wanted to cancel four months later because it stopped offering the early morning classes that she said she signed up for.

The gym did not provide any written contract between the parties to the Disputes Tribunal, so the referee said the terms and conditions would be those on the website.

"The only requirement is that written notice must be given to cancel the membership. BL gave written notice by way of email on, at the latest 14 March 2022. The requirement for written notice is met."

It said she could be charged an early termination fee of 25 percent of the remaining instalments or $250, but she should receive $1479.95 as a refund, covering the time of the membership that was unused.

Lifetime membership that wasn't

A man who had been a member of a gym for 13 years took a lifetime membership option in 2016, for $995.

But in 2022 the gym was acquired by another business and he was eventually told his lifetime membership was not legitimate.

He was not happy and began to challenge it. The next month he was told his membership was being terminated due to his confrontational and threatening interactions.

The referee said it could find nothing to support a contention from the gym that the lifetime membership paperwork was not legitimate.

"I am not persuaded that the paperwork has been falsified in any way."

The referee said on the balance of probabilities his lifetime membership was a valid, enforceable contract.

But the man had challenged a staff member about it in full view of other staff and members in a "persistent and challenging" way.

He was not given notice that his behaviour might lead to his contract being terminated, but the referee said by a narrow margin on the balance of probabilities, the gym could terminate his membership.

"I do record that if [his] behaviour did not fit the criteria under section 4 of the termination provisions, that section 3 allows termination for a breach of membership policies or club rules - and that the citing of this section would have been more appropriate."

He was given a $622.27 refund.

Member who never went

In 2022, a customer signed a six-month agreement with a gym for $170 a month and agreed to pay by direct debit. But the account number was incorrect and the gym said no payment was ever received.

The customer never attended the gym nor cancelled her membership. It wanted $935, which it said was six months' fees.

"The common law of contract allows parties to enter into legally binding agreements. The agreement does not allow the customer to cancel the membership until six months' fees have been paid. The customer is therefore bound to pay for the first six months. Five payments are now due, so those payments can be ordered," the referee said.

"The gym has said that it will cancel the contract at the end of the six months, although the agreement states that it rolls over after the six months until written cancellation is given. It is reasonable for the gym to treat the agreement as cancelled at the end of the six months rather than demanding written notice, because it is sufficiently clear that the customer does not wish to continue with the membership."

The customer was told to pay $850.

Parking

In another case, a man parked his vehicle in another business's carpark while he was at the gym.

He was given a breach notice of $95 and appealed it. He said he had only just signed up for the gym and thought it was a gym carpark.

He was then issued more fees, taking the total amount owning to $320.

A few months later, he received an email asking for $416.71.

The tribunal was given a photo of his vehicle outside the unit next to the gym, where there were "no parking" signs in the windows.

"[He parked in a carpark that clearly belonged to a business other than the gym he was attending. He was not a customer of that business, nor was he authorised to park there. Based on the previous discussion, it is clear that he trespassed when he parked his car," the referee said.

The tribunal said $95 was an acceptable amount to cover unauthorised use of the parking space.

"Although the fee is at the top end of what could be considered reasonable, there are likely to be costs associated with issuing a penalty notice and the amount charged was stated on the sign. The $95.00 fee is therefore payable."

But the referee said because there was no contract between the parties there was no basis to claim late payment fees and debt collection fees.

He was told to pay $95.

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