The gym chain, City Fitness, is facing charges under the Fair Trading Act for advertising membership fees that were allegedly misleading because they did not include a mandatory 3% fee.
The Commerce Commission said the gyms incorrectly described it as a transaction fee, even though it was not connected to the cost of processing transactions.
16 charges have been filed by ComCom. The charges pertain to the period from 21 December 2023 to 30 April 2025.
Vanessa Horne, the commission’s general manager for competition, fair trading, and credit, said businesses should include all compulsory fees in their advertised prices.
“Even a small per-person fee can add up to substantial profits for a large business.”
“If a business states a fee or surcharge is for the cost of processing the transaction, this must be truthful and accurate.”
“It shouldn’t be a difficult exercise to work out how much your gym costs,” Horne added.
She also noted that even after City Fitness introduced the mandatory 3% fee, it kept promoting a weekly price that excluded this charge.
“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.”
“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.”
Horne said the Commission will take action whenever prices appear misleading to ensure businesses are held accountable.