The New South Wales office of Fair Trading is urging customers not to deal with the FIT ‘n’ GO fitness centre after it received a number of customer complaints about the company continuing to charge them for services after they have cancelled their subscriptions.
According to Fair Trading Commissioner Rob Stowe, the business, Maverick Design Tribe Pty Ltd, advertises FIT ‘n’ GO’s fitness services as a “no contract” offer, despite customers being required to enter a binding member agreement in order to use the centre.
“We have had numerous reports of FIT ‘n’ GO deducting membership fees by direct debit even after the consumer has terminated their membership,” Stowe said in a statement.
“Consumers experiencing this problem have had difficulties contacting FIT ‘n’ GO to raise this complaint.”
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The FIT ‘n’ GO website provides a feedback form and email for customer enquiries, but also indicates a “Phone Call policy” that explains: “To keep our costs down, we don’t employee a receptionist to answer phone calls”. It states that all enquiries can be fielded through the website or directly through the centre, which is located in Seven Hills.
A number of individuals have posted reviews to an unofficial Facebook page for the gym, claiming the official page for the gym had been deleted and that their accounts were still being debited for services after they contacted the centre about the incorrect billing.
Fair Trading advises that customers who are experiencing issues with their membership contact the fitness centre directly before contacting their financial institutions to have payments stopped.
Companies must watch the fine print on contracts
Principal at Legal Vision Ursula Hogben told SmartCompany that while there is no legislation that specifically refers to how phrases like “no contract” should be used, issues around direct debit payments often pop up in the gym and telecommunications spaces.
When it comes to Australian Consumer Law, businesses should be aware that they must keep away from false and misleading claims both in the advertising and the terms and conditions of a product.
“[The law] specifically rules out false and misleading claims. A business cannot advertise a half truth and have different information in the terms or conditions,” Hogben says.
For subscription services, like subscription boxes, month-to-month gym memberships and phone plans, companies should be careful with ‘evergreen’ contracts that renew without a customer being given notice, as well as the fees that apply when a customer elects to exit an arrangement.
“For example, if someone gets a subscription box for a year and they cancel one month in, well you haven’t actually had to send them more than one month’s worth,” Hogben says, which could rule out a high cancellation fee.
Hogben says smaller operators need to understand that recent changes to unfair contracts legislation, which will deliver new protections for standard form contracts, also mean business owners have new responsibilities when creating contracts.
Small businesses that enter into standard form contracts with large businesses are now protected from clauses that unfairly advantage one party over another after a change that came in this month. This means, however, that businesses must also ensure contract terms are balanced if they enter into an agreement with another small provider.
“Think about this when small businesses deal with small businesses, because small businesses can outdo each other,” Hogben says.
Hogben adds that customer complaints on the deduction of fees for services like gym memberships can also be brought to the Australian Competition and Consumer Commission.
“You can also go to the ACCC if you think the advertising of a product is false or misleading,” she says.
SmartCompany contacted FIT ‘n’ GO via email this morning but did not receive a response prior to publication.