Complaints to OFT re. LC & Fitness Industry Association

The background to this complaint to the Office of Fair Trading is set out at OFT and User Contract at Harrow. In short, the OFT believes is has no relevant powers to act in response to LC reducing Harpers staffing without notice to contract holders or to the failure of the FIA to respond effectively to the complaint made to it about the staff reduction.

On this page there is one email with both complaints and one letter responding to both complaints. 

Complaint re Leisure Connection     Complaint re Fitness Industry Association

Reply re Leisure Connection     Reply re Fitness Industry Association

For some time the OFT has paid attention to gym membership and in March 2002 published "Guidance on Unfair Terms in Health and Fitness Club Agreements". This says that the OFT has received significant complaints and one area of concern was the use of terms that allowed clubs to make unrestricted changes to the services that are contracted for. Despite this guidance, the OFT felt unable to act on the complaint made by me about LC. The OFT indicated it could not act re the FIA not progressing my complaint to the FIA about LC. The OFT pointed out that  the FIA is not part of a voluntary code of practice for trade associations that would have allowed the OFT to investigate.

As of 19.2.05 the FIA had this claim on its website www.fia.org.uk/about_us.htm 
"The FIA promotes its Code of Practice, a minimum set of operational standards that our members either comply with or work towards compliance.  This is acknowledged by government and is a major initiative that supports the credibility of our sector.  If we are going to be taken seriously at the highest level we must show ourselves to have the ability to operate professionally through self regulation."  

I suggest that the FIA's failure to deal properly with my complaint has seriously impaired such credibility. If I was a member of the FIA I would be asking why a complaint about LC was ignored for so long, even after I had signalled my intention to take it to government if there was no action? PB

From: New Paul Burns 
Sent:  February 08, 2005 
To: Keith Baker (Consumer Regulation Enforcement Division, OFT)
Subject: Complaints re Fitness Industry Association and Leisure Connection 

Dear Keith Baker, Thank you for your letter of today received by email...

Complaint 1 - Leisure Connection and Unfair Terms Imposed on Contracts With Members of Harpers Fitness Across UK

Leisure Connection is a member of the Fitness Industry Association and therefore has accepted the FIA Code of Practice, which states that members shall "4. Ensure that any written contracts for members are in accordance with the Office of Fair Trading's publication, 'Guidance on Unfair Terms in Health and Fitness Club Agreements' (March 2002)."

Regardless of its membership, Leisure Connection is bound by legal requirements pertaining to unfair terms and should pay particular attention to "'Guidance on Unfair Terms in Health and Fitness Club Agreements' (GUTHFCA).

Over a long period Leisure Connection has advertised that its Harpers Fitness centres across the UK provide "full supervision". For example, "Harpers Fitness is the perfect environment for you to achieve your personal fitness goals, offering you all of the following: Full supervision from fully trained, friendly and helpful staff". This appeared on LC web pages for some years and therefore was an implied if not explicit part of the contract for people joining Harpers.

In June of 2004 I learned by email from one of Brent Council's Leisure Contract Monitoring Officers that "... we were informed formally in a meeting on 13th May but had been notified before this date, of Leisure Connections plan to nationally restructure their staffing.  This included all their Harpers gyms." One consequence of this restructuring was that "full supervision" ended and there would be times when either no member of staff would be present while customers were exercising." This was a significant, unilateral variation of contract introduced without notice.

One of the main areas of concern noted by the OFT in GUTHFCA were terms "that allow clubs to make unrestricted changes to services that are contracted for." (page 4)

I think that the following from the GUTHFCA document are relevant.

2.3 Suppliers who provide services to consumers accept certain contractual obligations as a matter of law, such as carrying out services to a reasonable standard. A term which could allow the supplier to refuse to carry out his side of the contract or any
important obligation under it, at his discretion and without liability, has the potential to imbalance the contract to the consumer's disadvantage. This applies not only to terms that allow the supplier to refuse to carry out his side of the bargain altogether,
but also to those which permit him to suspend the supply of any significant benefit under the contract. paragraph 15.2.

Section 11 deals with Right to change what is supplied. The summary guidance is, "Any significant change to the contract should be agreed with the member, not enforced by reference to a variation clause."

Section 11.2 reads: "Members are legally entitled to receive the service they agreed to purchase and not one which is merely similar. Any term which enables the club to alter the important characteristics of the way the service will be provided is likely to be considered unfair. An example could be a change of opening hours. A change considered 'minor' by the club may be important to the member."

Section 11.3 reads: "Any significant change to the contract should be agreed with the member, not enforced by reference to a variation clause. The member should be notified as early as possible of the club's wish to vary the contract, should be free to choose between accepting the change, or exercising a right to cancel with a refund of advance payments. Any significant change to the contract should be agreed with the member, not enforced by reference Any significant change to the contract should
be agreed with the member, not enforced by reference to a variation clause. The member should be notified as early as possible of the club's wish to vary the contract, should be free to choose between accepting the change, or exercising a right to cancel with a refund of advance payments.

Section 6 would also seem to apply. On page 16 the following is given as an example of recommended wording to avoid unfair cancellation without notice. "We will use our reasonable endeavours to give you at least 45 days notice of the change (either in writing or by prominently displaying a sign in the club) and, if you wish to terminate your membership due to reasons stated above, you can give us 30 days notice in writing to terminate."

I am not aware of any notice being given to Leisure Connection customers for the reduction of staffing.

Complaint 2 - Fitness Industry Association - Failure to Respond Appropriately to A Request to Investigate

On 19 June 2004 I emailed the Fitness Industry Association about the above matters. My first two paragraphs were:

"The FIA Code of Practice says that, "A Review Committee will assess the conduct of members who are reported to be violating the requirements despite having registered to ensure that any written contracts for members are in accordance with the Office of Fair Trading's publication 'Guidance on Unfair Terms in Health and Fitness Club agreements' (March 2002)."

"I am contacting to advise you that I believe Leisure Connection has not met the OFT's guidance with respect to its recent reductions in staff. Please see emails below for confirmation of the cutbacks."

I then detailed the complaint, not unlike the way in which it is set out above. I also asked the FIA to investigate standards at Vale Farm but stated, "I would rather that consideration of this second, local matter did not delay your response to the first, which appears to have implications for most Leisure Connections run centres."

On 23 June 2004 I received an email from Clare Bourne, FIA Membership Manager. Clare wrote: "Thank you for your correspondence concerning your issues with Leisure Connections (sic) and also in particular, the Vale Farm site. At this point, I will now forward the issues you have raised to both the Executive Director of the FIA, the Cheif (sic) Operating Officer of Leisure Connections and the General Manager of Vale Farm for further comments."

I received no further communication from the FIA until 23 December 2004 and no communication for Leisure Connection referring to the request made to FIA for an investigation until 24 January 2004. There was no response to reminders sent to Clare Bourne on 11 August and 12 September. The latter stated, "Dear Clare, I still have received nothing. Please advise what it happening. If I don't have a reply by the end of this week I will write to the Department of Trade and Industry."

Clare only communicated with me on 23 December after I copied her (and Graham Farrant, Chief Executive of Leisure Connection) my email to Christian Cartlidge. I have since advised Clare and Graham that I now wish matters to be dealt with by the OFT.

I appreciate that you there may be fewer powers for the OFT in relation to this complaint. However, the way the FIA, as a voluntary trade association, failed to respond to my complaint deserves some form of censure and should be seen to undermine their credibility. The FIA's Code of Practice refers to GUTHFCA as a requirement for its members yet the FIA took no meaningful action for seven months in response to my detailed information and then only contacted me when I had raised the matter with the OFT.

The FIA Code of Practice requires its members to:
* Acknowledge complaints by customers and maintain communication with them until the matter is resolved.
* Compliant operators are required to acknowledge customer complaints and maintain direct communication with the customer while seeking to resolve the matter. Operators should aim to resolve the matter as expediently as possible

It is gross hypocrisy for the FIA to have such a standard for it members but to have ignored my correspondence.

As FIA advertises that it will consider possible infringements of the FIA Code of Practice, its abject failure to deal appropriately with my request for an investigation raises the possibility that other issues and complaints referred to it have not been properly dealt with. In the wider consumer interest I believe that the OFT must investigate FIA record and ability in these matters.

Please let me know if you think any further information is needed before you decide whether and how to respond to these two complaints.

Paul Burns

Office of Fair Trading
Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX

Our ref: E/E/18027  10 February 2005                                                   

 Enterprise Act 2002

Unfair Terms in Consumer Contracts Regulations 1999 (‘The Regulations’):

Leisure Connection Limited and Fitness Industry Association

 I write further to your email of 8 February to my colleague Keith Baker, and to our conversation of 25 January, concerning your dispute with both Leisure Connection Limited and the Fitness Industry Association...

We have considered the information concerning your dispute and we take the view that it does not seem to raise any issues for the OFT. The OFT has powers under the Enterprise Act 2002 to enforce certain consumer protection regulations. The details of your complaint however, does not appear to indicate a breach of any of the regulations which we are empowered to enforce.

You have stated that you have two complaints, regarding Leisure Connection and the Fitness Industry Association. I explain our view on each below.

You have intimated, by reference to the Guidance on unfair terms in health and fitness club agreements, that you consider that Leisure Connection (while trading as Harpers Fitness) is failing to meet the requirements of the Unfair Terms in Consumer Contracts Regulations 1999 (‘the Regulations’). 

As some background; the Regulations provide that a standard contractual term, which has not been individually negotiated, shall be regarded as unfair if contrary to the requirement of good faith it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. Unfair terms are not binding on consumers.

Under the Regulations the OFT considers complaints and enquiries about standard terms in consumer contracts between businesses and consumers. It can take action to prevent the continued use of terms about which it has received complaints if it generally from the use of unfair terms in the future. The OFT cannot obtain redress for individual consumers who have already been affected by the use of unfair terms, or give opinions on whether specific terms are unfair. Only a court has the power to determine whether a term is unfair.

As I have noted above, the Regulations apply to terms and conditions included in contracts (this is often referred to as the ‘small print’). I note that your dispute refers not to the company’s contract terms, but to its trading practices — you refer to a reduction in staffing at the leisure centre. As such the Regulations would not apply in the manner in which your complaint suggests. 

As you know, we recently concluded negotiations with Leisure Connection regarding its terms and conditions, and subsequently the company agreed to revise a number of terms. A summary of the changes Leisure Connection agreed to make to its contract is attached for your information. (These appear on the Harrow & OFT page.)

I turn now to your complaint concerning the Fitness Industry Association. You have stated that you consider the Association has failed to adequately enforce its Code of Practice.  

As I previously explained in our conversation of 25 January, the Fitness Industry Association is not currently one of the trade associations that has applied for approval under the CCAS. Consequently, it is not required to attain the high standards required by an OFT approved Code of Practice. The OFT does not have powers under the regulations it enforces to take action against a trade association, which is not part of the CCAS, that fails to effectively enforce its Code of Practice.

I regret that we are unable to assist you in your individual dispute. If you are still involved in a dispute with Leisure Connection and/or the Fitness Industry Association we recommend that you contact your local authority Trading Standards Department for advice about your rights as a consumer.

I am sorry I could not be of more assistance.

Yours sincerely,

Christian Cartlidge   Contract Regulation Unit