Health And Fitness Code Of Practice

04 Feb 2009 questionsarchive

I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about the code of practice for the South Australian fitness industry.

The Hon. J.M.A. LENSINK: On 2 September 2007, the former minister for consumer affairs made an announcement that the revised health and fitness code of practice had been amended in the interests of better consumer protection. This includes that agreements with consumers will be either periodic or fixed-term agreements of no more than 12 months. On the social networking site, Facebook, a blog was posted yesterday at 7.34—

The Hon. R.P. Wortley interjecting:

The Hon. J.M.A. LENSINK: I prefer Facebook—in which one of my Facebook friends posted her discontent with a particular gym. It has since elicited some 55 comments as of one o'clock this morning. I would just like to quote from the blog. My friend states:

I have been a member of the Adelaide Next-Generation gym for probably close to two years now, paying around $100 per month for the honour...Recently, due to my 3 month trip overseas, I decided my $300 could be better spent and tried to cancel my membership. They would not let me do it. I sent numerous emails and called several times, but they insisted that I needed three months notice to do so...I am paying month by month as my initial 12 month contract has expired— I wonder whether that is in breach of the code— but this seems to make no difference to them...I then tried to place my membership on hold, offering to show them travel documents to prove that I was overseas. Again they said it was impossible, citing medical reasons as the only reason I could place my membership on hold.

Someone then responded to Kelly, as follows: I would think that, once you are out of your original 12 month contract, the three month notice clause would be hard to enforce. I suggest you go to your bank and ask them to cancel the direct debit.

Kelly then states: Oh trust me, I have tried to cancel the payment via my bank, but apparently even though I have, the paperwork the gym has means they can just reinstate it...I have to close my bank account.

A further complainant states: Me too, they got me! Thought I joined for only 12 months but apparently not, until you inform them in writing it continues and then when you do inform them they say it continues for another 3 months. I signed a letter when I joined stating that my membership will only be 12 months and will expire at the end of that. When I contacted them they said that I signed another document rescinding the initial one. WHY would I do that? They continued to remove my funds and despite numerous written request to provide me with the documents I supposedly signed still they cannot produce them. I've engaged a lawyer to recover my funds and the cost of legal aid.

Another person—

The PRESIDENT: I hope the honourable member is not going to read the 55 complaints into Hansard.

The Hon. J.M.A. LENSINK: No; it is only three extracts out of the 55, sir.

Sam said, at 12.30 this morning: I still have a Next Gen membership at the moment but should have got around to cancelling it by now...Last year I had a knee injury and even with a certificate from my physio, doctor and orthopaedic surgeon they would not 'freeze' my membership for any length of time because I had not been a member for twelve months. Then, when I had been a member for twelve months, by December, I had to go to Melbourne for work for the entire month but they wouldn't freeze my membership because they would only freeze it if you were going interstate for medical reasons.

As the you are clearly aware, Mr President, there are numerous other complaints, some of which refer to other fitness centres, but Next Generation is the main one. I have also examined the fitness code. My questions are as follows:

1. Is the minister aware of significant consumer concerns about this industry and, in particular, the Next Generation gym?

2. Will the minister instruct OCBA to investigate practices in this industry?

3. Will the minister conduct a review of the code of practice?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (14:36): I thank the honourable member for her important questions. The sorts of issues to which the honourable member has referred concern unfair contract terms and. indeed, these are matters the staff of the Office of Business and Consumer Affairs have been putting their mind to for some time. I am happy to receive the specific details the honourable member cites, and I will have the office follow that up to see whether any further steps can be taken to address that specific instance. Generally speaking, this is an issue that has been pressing the mind of ministers for consumer affairs right around the nation, and they have examined and agreed to a series of proposals for far-reaching consumer policy reform.

The agreement follows the decision of COAG, in March 2008, that an enhanced national approach to consumer policy must be developed, as recommended by the Productivity Commission in its extensive review of Australian law and policy. Ministers for consumer affairs, through their ministerial council, have agreed with the Productivity Commission that the linchpin of these reforms should be the enactment of a single national consumer law to replace the fair trading act in the individual states and territories. So, a forward looking, best practice approach has been undertaken in that regard. At a meeting in August 2008, the Ministerial Council for Consumer Affairs agreed that all Australian jurisdictions would adopt a new national consumer law based on the current consumer protection provisions of the Trade Practices Act 1974, incorporating the best practices of states and territories. A new law has to be agreed by all jurisdictions, and those provisions will remain constant. Some of the areas this new consumer law is looking at are regulations to prevent and respond to unfair terms in standard contracts. As the honourable member points out, many companies are adopting a 'take it or leave it' approach, often leaving the consumer with a most unsatisfactory service or product.

It has generally been considered that this is an area that needs a fairly considered review, and a review is currently being undertaken. A wide range of other areas of the code are being looked at as well, including, in a lengthy list, such things as implied warranties and conditions, penalties, disqualification orders and public warning powers.I understand that it is proposed that all Australian governments approve these arrangements, and the plan is that administrative arrangements will be in place by the middle of 2010, with parliaments having passed legislation by 2011. So, there is obviously a significant commitment to review those sorts of matters, and that is currently being undertaken. South Australia is committed to be part of that national consumer law review. In relation to the specific example mentioned by the honourable member, I am not sure under the current arrangements whether much can be done; however, I am happy to have the agency follow that up and try to address those concerns.