Expressing deep concern for “unscrupulous sales practices” of some Hong Kong fitness centres, the Consumer Council has named and shamed four operators it says targets young consumers with high-pressure sales tactics.
“After careful consideration, the council today publicly names four fitness centres and strongly reprimands them for their undesirable sales practices targeting inexperienced young consumers,” the council said in a statement. “The complaint cases levelled against the four centres involved some $40,000 on average and in the most extreme case it stunningly reached the sum of $1.75 million.”
The council said the centres’ behaviour is “detrimental to consumer rights and interests”.
The four centres shamed are:
- SML Studio/TIA Studio, CMB Wing Lung Bank Centre, Nathan Road, Mong Kok.
- Fitness Express, Mongkok Metro, Nathan Road, Mong Kok and Grand Place, Nathan Road, Mong Kok.
- Legend Fight & Fitness, Russell Street, Causeway Bay.
- A Plus Fitness, Argyle Street, Mong Kok.
More than 90 per cent of the complaints the council has received relating to the Hong Kong fitness centres, related to customers aged 25 or younger, and some of the victims were even mentally incapacitated.
“High-pressure tactics were deployed throughout the course of the sales process. Young consumers, under threat of personal safety, succumbed to the unrelenting pressure to sign the contracts so as to swiftly escape from the uncomfortable situation. Some traders also resorted to unconventional payment methods, including taking the complainants to major chain stores to buy gift vouchers to pay for fitness centre memberships, or requiring bank transfers or electronic payments and in some cases the funds were transferred to the personal accounts of the salesperson.
“Consumers were generally given only a copy of the signed contract but not an official payment receipt. Recent complaints have indicated that they were not even given a copy of the service agreement.”
The council said most complainants were allegedly forced to have a photo or video taken, or were made to declare and sign a statement that they had signed the contract of their own free will, and that they would not make any claims against the company in the future.
“Since the payments are made indirectly to the fitness centres, and there are no official receipts, it is incredibly difficult for consumers to seek legal redress in the face of such blatant disregard of consumer rights.”
Targeting the young
According to the council there has been a growing emergence of small independent Hong Kong fitness centres in areas frequented by young people, such as Mongkok and Causeway Bay, in recent years.
“Unscrupulous traders have seized the opportunity to set up fitness centres in small premises with limited gym facilities, so it’s hard to believe they have ever had a long-term development plan to provide quality service to consumers.
“In general, the modus operandi of these centres involves staff first appealing to the sympathy of complainants to help filling out a questionnaire, and then luring them to a nearby fitness centre. Once inside the premises, another sales team take over and use warm and friendly persuasion to lower the targets’ alertness as much as possible. On the pretext of validating the questionnaire, they then coax the targets to hand over their credit cards and identity cards with the actual intention of drawing up a contract and transferring funds.”
It was further alleged that any attempts to leave the premises were often met with oral and even physical threats of the staff.
In the past year, the council received 160 complaints against the four fitness centres, involving $6.78 million. In the case of the highest amount from A Plus Fitness, within just four months, the complainant was persuaded to buy a 15-year membership and 1050 private coaching sessions, totalling more than $1.75 million. Hundreds of thousands of this amount was borrowed from a moneylender. After explaining that the fitness centre could not open a credit-card account, its staff asked the complainant to make electronic transfers to pay for the membership and coaching sessions through 20 transfers of some $1 million in total.
Complaints against Legend Fight & Fitness revealed an even more unusual means of payment method. The complainants were taken to nearby electronic goods and personal care chain stores to buy gift vouchers worth tens of thousands of dollars as payment for the fitness expenses. As the complainants paid for the fitness centre membership with gift vouchers purchased from a third party and the fitness centre kept the receipts for the gift vouchers without giving a copy to the complainants, this will make it difficult for complainants to seek legal remedy in the future.
Despite repeated enquiries by the council about how the fitness centre converted the gift vouchers to cash and deposited the cash into the company’s bank account, the centre staff refused to respond.
Of the 237 complaint cases levelled against the four Hong Kong fitness centres between January last year and last February, the council referred 16 complaints to the Customs and Excise Department (CED) for follow-up whereas 51 complainants approached the CED direct to report their cases. Two other cases are currently receiving assistance from the Consumer Legal Action Fund (CLAF).
The council says that while the number of complaints about sales malpractices have been declining in recent years, after removing complaints relating to fitness centres closing down, those relating to the fitness sector have shown no signs of declining, running at 500 to 700 cases a year. Complaints about sales malpractices have continued to rise unabated, jumping 88 per cent last year to 415 cases.
The council advised consumers who felt coerced into signing a contract for an unreasonable amount to discuss the problem with their family immediately and if necessary, contact the Consumer Council or report the business to the Customs and Excise Department or the police.