‘Unfair’: Anytime Fitness in the crosshairs over hidden cost to ‘any gym’ promise
Anytime Fitness is misleading customers by claiming they can visit any of the chain’s more than 600 gyms in Australia without making clear that could come at the cost of increased fees, a tribunal has found.
In a decision that challenges the chain’s business model, the New South Wales Civil and Administrative Tribunal found that Anytime’s protocol of transferring memberships to the branch a customer uses the most, even if they have simply moved house, breached Australia’s consumer laws.
Under Anytime’s rules, if the new gym has a higher price than the customer’s old one, their fees automatically rise, forcing patrons to either accept the new membership fee or face what can be a hefty cancellation charge.
The matter was brought by a Sydney man, Reginald Yakob, who had signed up at Anytime Fitness Campbelltown on the city’s southwestern fringe and been a member there for 10 years.
After moving away to Parramatta, in the heart of the city’s west, he began going to a branch in the area, thinking he was entitled to do so because Anytime boasts that its members can access any of its facilities.
In line with its franchise model, different Anytime Fitness branches can determine membership fees, sign-up promotions and key costs. Inner-city locations tend to charge more because of higher rent and labour costs.
This meant that Yakob, who had signed a contract committing him to $19.95 in weekly membership fees in Campbelltown, was now being forced to pay $25.95 per week by the Parramatta South branch, representing a roughly 30 per cent increase.
He did not want to pay the higher weekly fee, but cancelling his membership was not a reasonable option either, as it would have incurred a penalty of about $400.
Yakob then took the matter to the tribunal, alleging that his Anytime Fitness branch had engaged in misleading conduct and that it had applied an unfair contract term under consumer law. He also alleged that it breached its own contract terms, as it did not give him the required 35 day notice for an increase in membership fees.
Ahead of the final hearing, the Anytime Fitness franchise in question defended the so-called transfer clause in its contracts, claiming it existed “to prevent individuals from signing up in lower cost areas and then starting to use gyms in higher-cost areas”. The business did not attend the final hearing or submit further evidence.
Tribunal member Michael Terceiro made several findings against Anytime Fitness, including that it breached its contract terms by only giving Yakob 31 days notice of the fee increases.
The more significant finding, however, was regarding the transfer clause Anytime includes in its contracts as standard. While not inherently an unfair contract term in the eyes of the law, Terceiro found “the way it was applied in this particular case was unfair”.
“The term is in place to prevent individuals signing up in the low-cost area then seeking to use a higher-cost gym…However, in the current case the applicant signed up in one particular area because he lived in that area and subsequently moved to a different area and started using the relevant Anytime Fitness gym in that area,” the decision said.
“Therefore, there was no suggestion that the applicant in this case [was] seeking to take unfair advantage of the Anytime Fitness system,” Terceiro said, adding that the gym could have taken steps to apply the membership transfer in a way that was not “effectively punishing him for changing gyms for a legitimate reason”.
Terceiro also found that Anytime Fitness’ marketing of a member’s ability to visit any branch was a “major selling point” that failed to disclose how it could lead to higher weekly fees, amounting to “misleading and deceptive conduct”.
The gym was ordered to refund Yakob $129.75 to cover overcharged payments.
Anytime Fitness members from other franchise members also appeared unaware of the transfer clause details when speaking to this masthead.
Winnie Kwan, who visits multiple branches of the chain in Sydney and the NSW south coast, said she did not know she risked being charged higher fees.
“The ability to visit any branch is so convenient, but it’s never been explained to me that that could happen,” she said.
Chris Carbonaro, who signed up at a branch near his home in the suburbs but visits a location near work frequently, was also unaware of the rule. “The convenience of being able to go anywhere is key for me, it’s why I go to Anytime.”
An Anytime Fitness spokesperson, responding on behalf of the company as well as the Parramatta South franchise, said that “when a member joins, that location becomes their ‘home club’ and is responsible for managing their membership”.
“Reciprocal access gives members the flexibility to train at other Anytime Fitness clubs across Australia when travelling or away from home, without needing a separate membership. Reciprocal access is different from a membership transfer. A transfer may occur when another club becomes the member’s primary place of training.”
Yakob said the tribunal’s decision spoke for itself.
The tribunal’s decision should have ramifications for the gym’s other customers across Australia, said Galit Alflalo, of the Consumer Action Law Centre.
“We are particularly concerned by Anytime Fitness promoting in its marketing material that individuals could sign up to a membership and use any gym in Australia.” Alflalo said, urging regulators “to take swift action against the use of unfair contract terms”.
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