Fitness club pays ACCC's first infringement notice for carbon claim

1 August 2012

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.

ACCC chairman Rod Sims said, "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." 

"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.

"This is a good outcome for consumers that may have been misled by the claim. The ACCC welcomes efforts by businesses to be open and transparent with consumers," Mr Sims said.

There is a range of ACCC guidance available to assist businesses in understanding their rights and obligations when making claims about the impact of the carbon price, including Carbon price claims – Guide for business. ACCC business guidance is available at www.accc.gov.au/carbon.

The ACCC will also host an interactive online webinar for small businesses on carbon price claims on 16 August 2012.The webinar is an opportunity for small businesses to ask the ACCC their key questions about carbon price claims. Small businesses are invited to register now at www.accc.gov.au/carbon.

The payment of infringement notice penalties is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

The infringement notice will be listed on the Public Register on the ACCC's website at www.accc.gov.au

 

Release number: 
NR 160/12
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Mr Rod Sims - (02) 6243 1108