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\nPhoto: RNZ \/ Alexander Robertson\n<\/p>\n
New Zealand’s biggest gym chain, City Fitness, is facing charges under the Fair Trading Act.<\/p>\n
The Commerce Commission said it had filed 16 charges alleging that City Fitness’s advertised membership fees were misleading because they did not include a compulsory 3 percent fee.<\/p>\n
The commission said the gyms inaccurately labelled it a transaction fee, but it was not related to the cost of processing the transactions.<\/p>\n
The charges relate to a period between 21 December 2023 and 30 April this year.<\/p>\n
Commission competition, fair trading and credit general manager Vanessa Horne said businesses should not exclude compulsory fees from their advertised prices.<\/p>\n
“It shouldn’t be a difficult exercise to work out how much your gym costs,” Horne said.<\/p>\n
“Even a small per-person fee can add up to substantial profits for a large business.<\/p>\n
“If a business states a fee or surcharge is for the cost of processing the transaction, this must be truthful and accurate.<\/p>\n
“After City Fitness introduced the compulsory 3 percent fee, it continued advertising a weekly price that did not include this fee, effectively advertising a price that people couldn’t get.<\/p>\n
“City Fitness also positioned itself as offering one of the cheapest membership options, at $6.99 per week. Although after adding on the compulsory fee, this was not always the case.<\/p>\n
“Consumers often shop around for the best deal, so if a business is advertising its prices as cheaper than they really are, it could give them an unfair advantage over competitors.”<\/p>\n
She said the charges should send a clear message.<\/p>\n
“When we see prices that we think are misleading, the Commission will act so that businesses are held to account.”<\/p>\n