'Regulation on long pre-paid contracts may be needed'
The Consumer Council said on Monday that it has to study in detail whether there's a need to better regulate lengthy pre-paid contracts, after the closure of a gym chain with memberships lasting up to three decades. Physical Fitness, which also provided beauty parlour services, announced its closure last Friday after operating for nearly 40 years. It cited high rents for the move. DAB lawmaker Edward Leung said on an RTHK programme that it was unreasonable that some of the fitness contracts the chain signed with customers stretched for decades. He noted that there are different types of regulation for fitness centres in the United States, Canada and Australia, such as a three-year maximum contract term, or lengths linked to the rental lease of each gym. Asked whether there should be new laws regulating contract lengths, Consumer Council chief executive Gilly Wong said the watchdog studied the matter some years ago, but needs to look at it in greater detail. "We need to look at other countries and regions and their latest regulations before coming to a conclusion," she said on the same programme. "But in principle, clearly when you look at the fitness and beauty industries that involve such large amounts of pre-paid consumption, it's a big problem and it causes major impact on consumers once these firms close down. Perhaps we need to look at how to better regulate these two trades." Wong added that so far, the council has received more than 600 complaints over the Physical Fitness closure, involving nearly HK$19 million.  She said customs officers are looking into whether there was any violation of the Trade Descriptions Ordinance. A  Physical Fitness customer told RTHK that he paid more than HK$10,000 for a decade-long membership and expects he has lost his money.   Unionist lawmaker Bill Tang, meanwhile, quoted Physical Fitness workers as saying that recent offers the chain made to consumers were "suspicious". "The discount offers to potential customers were more shocking. It's like the firm wanted to get more contracts signed for more new income, even though such offers never existed in the past," he said. "It's like what's in the news, they offered HK$8,000 for a decade, or even got customers upgraded as life-long members." Tang said he estimates that the chain has an unpaid wage bill of HK$15 million, noting that it has not paid staff since the start of August. He also said the estimate was based on the fact that at the start of this month, the Mandatory Provident Fund Schemes Authority said the chain was yet to make MPF staff contributions from June and July worth HK$3 million in total. Meanwhile, a few personal trainers collectively filed a report to the police, accusing the company of deceiving them into selling packages to customers.  One of them said the firm had sent messages to them saying they would be given a bonus of HK$1,000 for every HK$30,000 spent on contracts.