Lengthy gym contracts ruled unfair

The New Year resolution to get fit may have been and gone by now, but are you still paying for it? A High Court ruling has found that 700 gyms have been engaging in the heinous practice of tying their customers in with deals last from 1 to 3 years and demanding the full payment if they want to leave.

A company called Ashbourne Management Services Ltd had the task of drawing up agreements and collecting payments from 300,000 customers of small gyms throughout the land. It demanded immediate payment of the full sum, and threatened to damage the customers’ credit ratings were the full sum not received.

The Office of Fair Trading said the ruling to stop Ashbourne from using unfair terms would affect other businesses which gave customers black marks on their credit records.

‘We have received many complaints about Ashbourne's contracts, and many consumers have felt pressured into paying sums of money that they believed they did not owe," said Jason Freeman, of the OFT.

‘We are pleased that the court has confirmed that these practices are unlawful, and this should bring peace of mind to many people who have fallen into the trap of signing up to these lengthy gym contracts.

’Unfair terms that unreasonably bind consumers into long contracts they cannot leave, and heavy-handed collection techniques, have no place in businesses' dealings with consumers. This ruling should help traders to understand where the boundaries lie, and sends a warning that if they cross the line, the OFT and local trading standards services can take action.’

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