A former Queensland gym owner has been ordered to pay more than $80,000 in fines and restitution after a court found he breached Australian Consumer Law.
B&A Group Pty Ltd’s sole director Vasilis Comblas was found guilty on eight counts of reckless behavior and wrongly accepting payment under the Australian Consumer Law (ACL).
Trading as Fit 4 Life Health Clubs and Olympia Health Club, B&A Group operated gyms across the Sunshine Coast.
The Caloundra Magistrates Court found Comblas signed on nine members to his gym for year-long memberships with incentives he never delivered on throughout 2013 and 2014.
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In addition to Comblas relocating the gym shortly after these members signed on, the court found the new venue did not provide the same facilities offered to the customers when they signed up for memberships.
This included 24-hour gym access and free crèche facilities.
The court also found, on one occasion, members were locked out of the new facility because their swipe cards and access codes wouldn’t work.
The penalty for Comblas includes a fine $35,000, an order to repay the nine consumers $3,831.84 each and a conviction record.
B&A Group, of which Comblas is the sole director, was fined an additional $45,000 for the same conduct and charges.
Queensland Fair Trading executive director Brian Bauer says the penalty in this case was substantial because the conduct was carried out over an 18-month period. He said it also serves as wa warning to warn other traders against undertaking such practices.
“The behaviour of this trader demonstrates a blatant disregard for the law,” Bauer said in a statement.
“He continually took advantage of consumers and during the investigation, demonstrating he had no intentions of providing refunds.”
Legal Vision principal Damien Timms told SmartCompany businesses can run into trouble if they fail to provide what was promised to clients.
“If certain representations are made about the type and quality of service, a business owner must ensure he [or] she delivers accordingly,” Timms says.
He believes such cases are relatively frequent.
“There has been a lot of talk about the fairness of contracts and the enforceability of contracts that lock you in for 12 months,” he says.
“Victoria has been very consumer friendly in this area.”
Timms recommends small business owners remember their obligations under the ACL.
“Business should be aware of the extension of the unfair contracts provisions which will commence in September 2016 and which will extend consumer rights to small business,” he says.
He also reminds individuals to thoroughly read membership contracts before signing up for anything.
“As tedious as it might be, always read the fine print,” he says.
Smart Company attempted to contact B&A Group Pty Ltd and Fit 4 Life Health Clubs but did not receive a response prior to publication. The phone number listed for Olympia Health Club has been disconnected.
SmartCompany also attempted to contact Comblas via registered business Next Generation Express Fitness but the phone number listed for the business has been disconnected.