LA Fitness shamed into dropping contract

[spudbynight]

http://www.guardian.co.uk/money/201...ropping-contract-pregnant-woman?newsfeed=true

Gym chain LA Fitness has been shamed into dropping the £360 contract it was enforcing in the case of a heavily pregnant woman who had fallen on hard times, thanks to pressure from Guardian readers who were willing to pay her bill.

Seven months pregnant Hannah, a reader from Billericay in Essex, had written to the newspaper in December 2011 after her husband lost his job, leaving the couple living on state benefits.

The couple, who were also about to move 12 miles away from their nearest gym, had been loyal LA Fitness members for seven years and asked the gym chain to reconsider the two-year verbal contract it had tied them in to. However, the gym insisted the couple pay the full 15 months left of the contract, which would cost them £780.

"Despite us sending LA Fitness a letter proving my husband has been let go from his job, his employer didn't use the word "redundant" in the letter, so LA Fitness will not accept it as a valid reason to terminate the contract," said Hannah. "I have been told that being pregnant entitles me only to temporarily freeze my membership. We do not drive but moving away does not apply, as we need to be 20 miles from the nearest gym to cancel. We just cannot pay."

To make matters worse for the couple, the house they were due to move into then fell through, leaving them facing homelessness.

The couple wrote to the Guardian's Consumer Champions' column for help but despite repeated arguments from the newspaper citing both legal and compassionate reasons that the couple's outstanding charges should be reviewed, the gym chain refused to budge. After six weeks it agreed to waive six months fees, a position that still left the couple unable to pay the remaining £360 .

However, on publication of the letter, dozens of outraged readers contacted the paper offering to pay the couples outstanding contract costs. The story then circulated on Twitter, causing even more outrage and more offers of money for the couple. Others were so outraged that they decided to cancel their own memberships with the gym chain.

"Just wrote to LA Fitness and ended my membership. DD [direct debit] cancelled. Let them sue us all," said one.

The Guardian contacted LA Fitness again and it has now agreed to waive all remaining charges for the couple.

"Having reviewed the case in question, we appreciate that this is a unique situation and that the couple are undoubtedly going through a very difficult and distressing time," it said in a statement. "We appreciate that their circumstances have changed dramatically since they first signed with us, and on this occasion we will waiver any further membership fees with immediate effect."

Hannah, who is due to give birth in two weeks, said she was "gobsmacked" by the support of those who had offered to pay the couple's contract costs for them and "ecstatic" that the gym chain had changed its mind. "We really needed some good news at the moment. You have no idea how grateful we are to you and all those people who wanted to support us. You have been a complete answer to our prayers."

Now, I have a friend who was in a similar position. He was made redundant and the gym he joined held him to the duration of it. (Despite his only income being £100 a week in benefits)

Now, my own take on this is that if sign up to a contract then you are locked into that regardless of any change in your personal circumstances. Any exit from the contract is conditional on good will. What doesn't sit well with me morally are the following two points :

1 - Why does a gym membership require any sort of contractual tie in. Any consumer agreements I can think of involve the consumer receiving the full value of the contract up front or some sort of tangible item. You take out a mobile phone contract you get a phone on day 1 for example. With gym membership you simply pay for a service. If you were to stop using the service before the end of the contract you don't walk away with anything more than what you have paid for.

2 - From what I understand the entire gym industry business model is built around the assumption that the majority of customers will never attend.

 

[spudbynight]

This is the original piece in the Guardian on this.

My husband and I have been loyal customers of gym chain LA Fitness for six years. I am seven months pregnant, we are moving 12 miles away from the gym and don't drive. My husband has lost his job and we are now on benefits. We can barely feed our children right now and can't afford the two-year contract.

Despite us sending LA Fitness a letter proving my husband has been let go from his job, his employer didn't use the word "redundant" in the letter, so LA Fitness will not accept it as a valid reason to terminate the contract. I have been told that being pregnant entitles me only to temporarily freeze my membership. Moving away does not apply, as we need to be 20 miles from the nearest gym to cancel. We just cannot pay. HB, Billericay, Essex

This has to be one of the most distressing cases we have dealt with. By the time we managed to get you some sort of answer, you were about to be made homeless because your landlady wanted the property back and the home you were due to move into had fallen through. You were due to give birth in four weeks, and your husband was still out of a job.

Initially, we approached LA Fitness pleading on grounds of compassion, but it would not budge. It was sticking to the letter of its contract and would not look beyond this. We then talked to the Office of Fair Trading. Although it will not comment on individual cases, it directed us to a ruling recently made in the high court about a gym management company, Ashbourne. The court ruled that some of Ashbourne's small-print terms for thousands of gym membership contracts were unfair and therefore unenforceable – a ruling that could, in theory, be applied to other gym contracts.

We talked to the lawyers at Which?, who suggested you could reasonably rely on paragraph 174 of the Ashbourne ruling, in which Mr Justice Kitchin stated that gym agreements that set minimum membership periods of 12, 24 or 36 months are "so weighted as to cause a significant imbalance in the parties' rights and obligations in a manner and to an extent which is contrary to good faith".

You could argue that the length of the contract you signed with LA Fitness – 24 months – was worded to cause "a significant imbalance" between yourself and the gym.

Understandably, you and your husband feel you do not have the energy to go to court over this. After much pushing by us, LA Fitness eventually agreed to come to a compromise and will charge you only for a further six months of the contract. This has saved you £420 but means you are still liable to pay £360. You say you don't know how you will pay it, but have agreed to the compromise because you don't feel you have a choice.

http://www.guardian.co.uk/money/2012/jan/20/la-fitness-gym-contract

 

[#Chri5#]

You answered point 1 with point 2 really.

I would suspect most folks get bored after a couple of months (witness the New Year rush in most gyms and how they are back to "normal" by March or April). So a 12 month contract keeps their revenue stream going nicely.

I notice that Pure Gym seem to be expanding quickly and their major USP is no contract. If you're prepared to sign a contract (which is legal), then you should be prepared to honour it.

 

[sbi5ar]

So in future all you need to do is contact a newspaper and get them to put a bit of pressure on the gym...

 

[NiCkNaMe]

They agreed the contract, I don't see how LA Fitness are the bad guys here. They probably liked the savings they could make by agreeing to a nice 24 month contract. Can't have it both ways!

 

[Nexus]

Yup as already said yourself, they rely each year on people signing up and never going. Infact if most members went to their gyms it would be over subscribed most likely.

 

[robgmun]

I thought gyms now can issue contracts? Something happened late last year about this? I know Virgin Active don't do contracts anymore

 

[:(Rhodri:)]

They agreed the contract, I don't see how LA Fitness are the bad guys here. They probably liked the savings they could make by agreeing to a nice 24 month contract. Can't have it both ways!

This is true unfortunately, and is why I'm paying more a month to not be tied into a long term contract. If there's any chance you think you're circumstances will change, don't sign up to a long term contract.

 

[spudbynight]

You answered point 1 with point 2 really.

I would suspect most folks get bored after a couple of months (witness the New Year rush in most gyms and how they are back to "normal" by March or April). So a 12 month contract keeps their revenue stream going nicely.

I notice that Pure Gym seem to be expanding quickly and their major USP is no contract. If you're prepared to sign a contract (which is legal), then you should be prepared to honour it.

I was looking at point 1 from a consumer standpoint. If you enter into a contract you get something back in return. As a consumer why should you need to enter into a contract for something from a service provider.

Can you imagine going to your barber and asking for a haircut only to be told you couldn't have it cut unless you signed up for a 36 month contract.

I don't deny that a contract is legally binding. I just see gym contracts being weighted completely in favour of gym companies. There is zero benefit I can see for a consumer.

There also laws in this country protecting consumers (not businesses) from unfair contracts.

 

[NiCkNaMe]

I was looking at point 1 from a consumer standpoint. If you enter into a contract you get something back in return. As a consumer why should you need to enter into a contract for something from a service provider.

Can you imagine going to your barber and asking for a haircut only to be told you couldn't have it cut unless you signed up for a 36 month contract.

I don't deny that a contract is legally binding. I just see gym contracts being weighted completely in favour of gym companies. There is zero benefit I can see for a consumer.

There also laws in this country protecting consumers (not businesses) from unfair contracts.

How is paying for a landline, or internet, or TV service any different to a gym? How is it the gyms fault if you don't go? They are providing a tangible service, it's available to you whenever you want to go. Just like your landline, internet or TV... if you don't watch it you're effectively paying for nothing.

Offering a contractual service allows the gym to forecast revenues, invest and thus survive.

... and before you say Pure Gym doesn't ask for contracts. True. However, lets see where they are in 12-18 months.

 

[Nexus]

But to be fair to the gyms, they likely would struggle if they were only on a charge per use basis.

You also have to bare in mind that private gyms are a luxury, everyone has council gyms they can use on a pay per use basis.

 

[Tekgun]

2 - From what I understand the entire gym industry business model is built around the assumption that the majority of customers will never attend.

This, they need the contract, they would never make enough money if they charged per session or something fair like that.

 

[spudbynight]

How is paying for a landline, or internet, or TV service any different to a gym? How is it the gyms fault if you don't go? They are providing a tangible service, it's available to you whenever you want to go. Just like your landline, internet or TV... if you don't watch it you're effectively paying for nothing.

Offering a contractual service allows the gym to forecast revenues, invest and thus survive.

... and before you say Pure Gym doesn't ask for contracts. True. However, lets see where they are in 12-18 months.

All the things you have mentioned have an actual start up cost. You take out a landline and there is a cost of actually provisioning it. There is no such cost for joining a gym. Also none of them have built their business around the assumption that the majority of their customers will not use their services.

 

[spudbynight]

This, they need the contract, they would never make enough money if they charged per session or something fair like that.

The word fair is the key point. While they may be acting legally surely there is something morally questionable about a company that can only exist by treating its customers unfairly.

 

[anything I don't mind]

Gym memberships are over priced imo. Some of them are pretty small and don't even have pools and they want ridiculous amounts per month.

 

[Borrish]

The word fair is the key point. While they may be acting legally surely there is something morally questionable about a company that can only exist by treating its customers unfairly.

How are they treating their customers unfairly? They charge you a set fee to attend for a contract length that you've agreed with them and signed. If you don't like the terms then don't sign it. They even tell you how much notice you have to give if you want to cancel it. You can even go to a pay as you go gym if you like but in my experience they're no-where near as nice as the ones you sign a contract for.

 

[arc@css]

Popped into one of their gyms a few months ago; felt like a job interview rather than just taking me round for a look at the facilities. I've never been asked so many questions. Put me right off.

 

[FNGsam]

I always assumed you could pay on a per visit basis but the savings you make to sign up for 12 months and have it available at anytime were the reason people did this.

 

[Metalface Mark]

Gym's arent charging a monthly membership in most cases, the membership is a single price, you just get the option to pay for it in instalments, hence why its like any other credit agreement.

I pay my gym membership yearly in advance. If you dont want a contract, goto a gym that lets you pay as you go. User error really.

 

[mame]

I've been a member of quite a few gyms over the years. I joined Pure Gym in October when they opened here for £9.99/month for the first year then £16.99/month after. The £16.99 never increases for as long as you are a member and you can cancel at any time. the website even says if you want to cancel, just cancel the DD yourself. There's another gym just opened near here that does a similar thing. Unless they do change something, I'm pretty sure I'll never cancel as it actually goes down each year compared to wages etc. If they are successful, I would hope that it's the beginning of the end for these contracts.