City Fitness misled nearly 200,000 customers with deceptive membership pricing, according to the Commerce Commission. The allegations surfaced during an investigation that revealed significant financial gains for the gym chain.
The Commerce Commission filed 16 charges against City Fitness under the Fair Trading Act. They claimed that the gym’s advertised membership prices were misleading because they did not include a compulsory transaction fee. This fee was labeled misleadingly as it was unrelated to processing costs.
Over a period of 16 months, the transaction fee generated just under $1.6 million. Nearly 200,000 people were affected by this misleading pricing strategy.
City Fitness continued to advertise its membership prices despite the ongoing investigation. The Commerce Commission described this marketing strategy as a cynical ploy designed to exploit consumers.
City Fitness defended itself by claiming that the issue arose from carelessness rather than an intention to deceive. James Every-Palmer KC stated that the company aimed to keep prices low but failed due to flawed implementation.
Vanessa Horne from the Commerce Commission emphasized that false advertising provides an unfair advantage over competitors. Jacob Barry remarked that none of the money has been returned to affected customers, highlighting a lack of accountability in this case.
The judge overseeing the case, David Clark, has reserved his decision. Observers expect further developments as officials continue to address consumer protection issues in advertising practices.
