High Court rules thousands of gym contracts are unfair.
In a recent ruling, the High Court has held that minimum contract length terms and a number of other key terms in thousands of gym membership contracts, recommended and enforced by Ashbourne Management Services Limited, are unfair and hence unenforceable.
Simon Dakers, Our Litigation Team Leader says: "The court also ruled that a number of Ashbourne's techniques for collecting arrears were unlawful "
Ashbourne draws up membership agreements, and then collects members' payments, for over 700 gym clubs. In many cases consumers found that they stopped using the gym after a few months, or their circumstances changed so that continued membership was no longer affordable or practical. However the contracts had minimum membership periods of between one and three years and Ashbourne routinely stated consumers could not terminate their membership. If consumers stopped paying Ashbourne demanded immediate payment of the full sum - often many hundreds of pounds - for the whole minimum period.If the consumer still refused to pay Ashbourne put pressure on them by threatening to damage their credit rating by referring the debt to a credit reference agency.
Mr Justice Kitchin ruled that Ashbourne's business model '… is designed and calculated to take advantage of the naivety and inexperience of the average consumer using gym clubs at the lower end of the market,' whom he considered that AMS 'exploited.' He said that the minimum period is 'a trap into which the average consumer is likely to fall.'
Simon comments: "The judge decided that it is unlawful to try to enforce or even to include unfair terms in contracts, where doing so could lead the consumer to pay money they would not otherwise have done. 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."
If you feel you may need advice our Litigation Team can advise you on your rights. Call us on 01282426251 for further information.