Korea Consumer Agency Received 11,104 Dispute Cases in the Past 3 Years
92% Related to Contract Termination
Increase in Damages from Subscription Services
Recently, there has been a growing interest and demand for physical fitness, as seen in the ongoing 'fit body' trend on social networking services (SNS) and the popularity of the 'Ounwan' (Today’s Workout Completed) hashtag. Riding this wave, the number of gym (fitness center) businesses has increased significantly. However, consumer damages related to these businesses have also continued to occur, prompting the need for caution.
According to the Korea Consumer Agency on May 15, a total of 11,104 requests for gym-related consumer dispute resolution were filed with the agency from 2022 through March of this year. In the first quarter of this year alone, 873 cases were reported, marking a 17.8% increase compared to the same period last year (741 cases). When broken down by reason for application, cases related to 'contract termination'?such as refusal to withdraw from a contract or provide a refund, and disputes over penalties for early termination?accounted for the vast majority at 92.0% (9,290 cases).
In terms of dispute resolution outcomes, less than half of the cases resulted in settlements such as refunds or compensation. The Korea Consumer Agency explained that the main reason for this was significant disagreements over whether to use the regular price or the discounted price as the basis for calculating the refund amount in cases of early termination.
The number of gyms in Korea continues to rise. According to the Ministry of Culture, Sports and Tourism, there were 11,144 gyms in 2021, 12,669 in 2022, and 14,773 in 2023.
Recently, it has become possible to pay for gym usage on a monthly basis through mobile applications (apps). The convenience and the ability to avoid the burden of long-term registration and high upfront payments have led to increased use of these 'subscription services.' However, consumer damages related to these services are also on the rise.
From 2022 through March of this year, a total of 100 consumer damage cases related to 'gym subscription services' were reported, with 30 cases filed in the first quarter of this year alone?three times higher than the same period last year (10 cases). By type of damage, 'failure to notify about automatic payments' was the most common at 38.0%, followed by 'refusal to provide a refund upon contract termination' at 33.0%, 'lack of a contract termination function' at 9.0%, and 'unjustified billing for usage fees' at 7.0%.
To prevent consumer damages related to gyms, the Korea Consumer Agency emphasized the following: ▲ Be cautious about entering into long-term (multiple-use) contracts, as it is easy to be lured by heavily discounted or pre-opening special promotions (pre-sale events); ▲ Always check the refund policy before signing a contract, and especially scrutinize the terms and conditions when using gym subscription services through non-face-to-face transactions.
Additionally, the agency advised consumers to: ▲ Whenever possible, use a credit card and pay in installments over three months or more when making payments of 200,000 won or more, to prepare for situations such as business closures or loss of contact with the operator; ▲ Secure evidence such as contracts, registered mail, and text messages to prepare for potential disputes.
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