Refunds for Gym and Pilates Memberships to Become Easier... Fair Trade Commission Orders Correction of Unfair Terms

Review of Contract Terms from 20 Chain Fitness Businesses
14 Contracts Include Clauses Prohibiting Mid-Term Cancellation and Refunds
Excessive Refund Fees and Liability Waivers for Accidents Ordered to Be Revised

The Korea Fair Trade Commission has identified unfair terms and conditions, such as non-refundable clauses, in the contracts of major chain fitness centers and demanded corrective action.

On October 19, the commission announced that it had reviewed the contract terms of 20 chain fitness businesses-including gyms, Pilates, and yoga studios-and found four types of unfair terms that must be rectified.

The investigation targeted contracts from 20 chain fitness businesses (16 gyms, 2 Pilates studios, and 2 yoga studios) that had received a high number of consumer complaints over the past four years. The results showed that 14 of these businesses included clauses in their contracts stating that mid-term cancellations or refunds were not allowed.

One common example is a clause stating that memberships purchased at event or promotional prices are non-refundable. Some businesses also specified that refunds are not allowed for simple changes of mind or personal reasons.

Consumers are legally guaranteed the right to terminate a contract at any time during the contract period. This is because fitness businesses typically operate on monthly or multi-session contracts, making them subject to the Door-to-Door Sales Act.

The commission stated that completely blocking refunds constitutes an unfair contract term, and has therefore required these terms to be corrected.

Terms that impose excessive fees were also ordered to be rectified. Some businesses had clauses stipulating that even if a customer used the facility for just one day before canceling, it would be counted as a full month of use.

By law, cancellation penalties for mid-term termination due to customer circumstances can only be charged up to 10% of the total contract amount.

Clauses stating that the business bears "no responsibility under any circumstances" if a member is injured during exercise or has personal belongings stolen were also required to be amended. Even if an accident is due to the member’s negligence, the business must be held responsible to the extent that it is at fault.

Other unfair terms, such as only accepting refund requests during limited hours to obstruct customers' right to cancel, were also ordered to be corrected.

Going forward, the commission will review whether the corrected terms are actually being implemented and will monitor other businesses beyond those included in this investigation.