Fitness chain runs into fees row

PUBLISHED : Sunday, 26 September, 1999, 12:00am
UPDATED : Sunday, 26 September, 1999, 12:00am

A TRIBUNAL has questioned the tactics of Hong Kong's biggest fitness chain, which in the past six months has taken legal action against more than 500 members.

Many of the writs lodged with the Small Claims Tribunal by California Fitness Centres involve customers who try to leave the club but fail to observe rigidly enforced contractual rules stating a month's written notice of resignation must be given.

Arrears of between $700 and $800 a month build up before California takes legal action.

Small Claims Tribunal adjudicator Queeny Au-yeung questioned the approach this week.

She told California credit-control manager Dickson Tang: 'In general, the court is not satisfied that monthly subscription fees snowball like this and you let it continue before chasing for large amounts of money.' The fitness chain filed 522 claims with the tribunal between March 30 and September 15 this year seeking payment of subscription arrears.

It defended its policy, saying it followed procedures laid down in its membership contracts, which staff were always available to explain to members.

But some members complained they were unaware of the terms of the contracts, while others said the company failed to promptly inform them of arrears, leading to outstanding fees spiralling month by month.

Lam Chung-shun, who was sued for six months' fees of $4,194, said staff had not clearly explained the contract, which is available only in English.

'I wasn't able to understand fully what it was all about because I do not know much English,' he said.

Mr Lam, who joined the club in May last year and paid for two months, said the company only informed him of the arrears almost five months later. He denied he received any reminder notice.

Benny Lam, who was sued for two months' fees of $1,398, claimed he faxed his resignation to the company in August last year.

In November last year the club had sent him a reminder and denied it had received his fax.

'The fitness centres have the right to run their business in this way, but it is unfair to customers because it seems they are trying to squeeze extra income from us,' he said.

He reached an out-of-court settlement with California.

Louis de Montalember, accused of owing $3,495 for five months' membership, said the company adopted a 'very aggressive collection policy'.

Mr de Montalember has refused to pay what he described as the 'unwarranted' sum because he had not used the facilities during that period. His case was adjourned to a later date.

California chief executive officer Eric Levine denied members were treated unfairly and said they were sent reminders and contacted by phone after the first missed payment.

Mr Levine said member-relation officers were available at the club to go over contracts to ensure members were satisfied.

'If you ask anybody who comes out of the court who has lost their cases, regardless of whether they are big or small cases, I don't think you get a fair assessment of the situation,' he said.

California vice-president David Welsh said: 'In the past, I have had the situation that people try to use the press as a lever. What we have to do is to make sure that we safeguard our members, so we are being pro-active to make sure everybody understands the terms and conditions in the contract.' Mr Levine said contracts would be available in English and Chinese by the end of this year.

California Fitness Centres operates four clubs in Hong Kong and has 25,000 registered members.

Mr Levine said: 'At this point we believe we have followed all the procedures properly and have correctly given the people every chance to follow the agreement, and we are satisfied with our position.' He said it sometimes took a long time to bring a case to court because the company needed to contact members.

The company would not terminate a membership unilaterally because members would have to pay again to rejoin, he said.