After Inducing Cash and Lump-Sum Payments, Health Clubs Still 'Closing and Running Away'... What Are the Countermeasures?

Daegu City Issues Consumer Damage Forecast as Harm Increases
Damage Can Be Reduced by Paying in Installments Over 3 Months or More

Recently, in Dalseo-gu, Daegu Metropolitan City, a large gym suddenly ceased operations, leading to complaints filed by members with the police. It was revealed that the gym continued to sell membership rights at discounted prices to both existing and new members even after the building ownership was transferred to a financial institution through a public auction, drawing public criticism.

The damage extended to other areas within Daegu as well. A gym in Seo-gu, unable to pay its water bills, sold membership rights before halting operations, prompting a recent police investigation. In response to the consecutive gym closures and resulting citizen damages, Daegu City issued Consumer Damage Alert No. 4.

As gym closures continue to cause harm to citizens, Daegu City has issued Consumer Damage Forecast No. 4. The photo is not related to the specific content of the article.
Photo by Moon Honam munonam@

According to Daegu City on the 17th, an analysis of consumer consultation statistics from January to the 14th of this month showed that consultations related to gym services totaled 355 cases, a 16% increase compared to 257 cases during the same period last year. Notably, last month alone saw 42 cases, a 45% surge from 29 cases the previous year.

Among the detailed damage reports, contract cancellations, terminations, or penalty fees accounted for 264 cases (74%), the highest proportion. Within these, the most frequent issues involved gym operators cutting off contact or delaying refunds due to financial difficulties.

Of the contract cancellation, termination, or penalty-related consultations this month, 50% (7 cases) involved consumers seeking refunds for remaining membership fees following the closure of a large gym in Dalseo-gu, Daegu.

Reports of Damage Related to Gym Closures Have Doubled in Five Years... Relief Remains Difficult

Consumer damages related to gym closures have been steadily occurring over the past few years. Despite many consumers suffering losses, effective remedies are still lacking. Therefore, special caution is needed as it is difficult for consumers to receive compensation when a gym has closed or has stopped operations in preparation for closure.
[Photo by Yonhap News]

Consumer damages related to gym closures have been steadily occurring over the past few years. Despite many consumers suffering losses, effective relief measures remain inadequate. Therefore, special caution is necessary as consumers find it difficult to receive compensation when gyms close or suspend operations in preparation for closure.

According to 'Consumer Damage Status Related to Membership Rights' received by Kim Han-gyu, a member of the Democratic Party of Korea, from the Korea Consumer Agency, the number of damage cases increased from 2,400 in 2019 to 3,431 last year, nearly doubling. Furthermore, as of August this year, 3,721 cases have been reported, suggesting that the total damage cases for this year may approach 5,000.

Although related damages are rapidly increasing, there are virtually no effective relief methods. The Consumer Agency is a dispute mediation institution, not an investigative body, so if contact between parties is lost, there is practically no action that can be taken.

Other relief methods such as civil or criminal lawsuits or court payment order applications exist but are difficult to utilize. In civil or criminal lawsuits, victims must bear the time and cost of litigation, and even if they win, there is no guarantee of recovering their money.

Applying for a court payment order is also complicated because it requires knowing the actual residence of the closed business operator, among other procedural difficulties.

Consumers Must Exercise Caution with Installment Payments

In the end, at present, consumers using sports facilities have no choice but to be cautious themselves. Therefore, even if the unit price is high, it is better to make short-term contracts rather than expensive long-term contracts, and if you want to make a long-term contract, you should look for facilities that have been operating in one place for a long time.
[Photo by Hyunmin Kim kimhyun81@]

Due to procedural issues, the National Assembly has already proposed bills to reduce such damages, but discussions remain slow. Similar bills were proposed during the 20th National Assembly but were discarded.

Currently, consumers using sports facilities have no choice but to be cautious themselves. Therefore, even if the unit price is high, it is better to opt for short-term contracts rather than expensive long-term contracts, and if entering a long-term contract, choose facilities that have been operating for a long time in one location.

Additionally, for long-term membership contracts costing 200,000 KRW or more and lasting over three months, it is advisable to pay by card in installments over three months or more rather than paying in cash to reduce potential damages. Paying in installments over three months allows consumers to exercise installment defense rights with the card company later.

Furthermore, gym membership contracts should avoid long-term agreements of 12 months or more, and consumers should avoid gyms that encourage lump-sum payments by cash or credit card.