Fitness club pays first infringement notice for carbon claim

The Australian Competition and Consumer Commission (ACCC) has announced that GFC Berwick Pty Ltd, trading as Genesis Fitness Club - Berwick, has paid an infringement notice in the amount of $6,600 in relation to carbon price claims made about the cost of gym membership fees.

In April 2012, GFC Berwick Pty Ltd sent a letter to 2,122 of its members promoting a 'RATE FREEZE' offer, which offered members a range of lengthy contract extensions at current or reduced membership rates. The letter represented to members that by taking up this offer members could avoid a fee increase of 9-15 per cent due to the carbon price.

"The ACCC believes that GFC Berwick did not have a reasonable basis for claiming the carbon price would increase the cost of gym memberships by 9-15 per cent. We understand that over 200 members took up the offer and extended their contract. We are concerned that the false claims about the carbon price may have encouraged these people to sign lengthy contract extensions they otherwise would not have," ACCC chairman Rod Sims said.

"Businesses are free to set their prices as they see fit but must carefully consider the basis for making carbon price claims and ensure such claims are truthful and have a reasonable basis," Mr Sims said.

As part of the resolution of this matter, the CEO of the Genesis Division of Belgravia Health & Leisure Group Pty Ltd, the company which manages the franchise network, wrote to all affected members on behalf of GFC Berwick offering them the opportunity to withdraw from the contract extensions at no cost.