Photo: RNZ / Alexander Robertson
New Zealand’s biggest gym chain, City Fitness, is facing charges under the Fair Trading Act.
The Commerce Commission said it had filed 16 charges alleging that City Fitness’s advertised membership fees were misleading because they did not include a compulsory 3 percent fee.
The commission said the gyms inaccurately labelled it a transaction fee, but it was not related to the cost of processing the transactions.
The charges relate to a period between 21 December 2023 and 30 April this year.
Commission competition, fair trading and credit general manager Vanessa Horne said businesses should not exclude compulsory fees from their advertised prices.
“It shouldn’t be a difficult exercise to work out how much your gym costs,” Horne said.
“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.
“After City Fitness introduced the compulsory 3 percent fee, it continued advertising a weekly price that did not include this fee, effectively advertising a price that people couldn’t get.
“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.”
She said the charges should send a clear message.
“When we see prices that we think are misleading, the Commission will act so that businesses are held to account.”
Doug Hatten, CityFitness chief operating officer, said they implemented the fee in 2024 after several years without a fee increase.
He said it was a way to apply the “smallest possible increase”.
“The Commerce Commission later suggested that how the transaction fee was advertised was potentially misleading. After being made aware of this, we proactively removed the transaction fee and instead implemented a new inclusive headline price for new members from May 1, 2025.
“CityFitness has long been New Zealand’s most affordable national fitness brand, and we remain committed to making health and fitness accessible to everyone. While our intent was to keep costs as low as possible, we recognise the importance of ensuring we are operating within the Commerce Commission guidelines. We will review their findings carefully and apologise to any anyone who may have been confused by the previous fee structure.”
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