California Fitness gym closures: Get firms to insure packages over $500

The California Fitness closure highlights the need for better consumer protection and business practices ("California Fitness shuts remaining outlets"; yesterday).

The failure of the gym chain and other health and spa-related businesses shows how customers are not being protected.

I call for a ban on package payments of more than three months or $500.

Packages that cost more than $500 should be insured in the form of a health club surety bond. The insurers would also be in a position to question the financial fitness of the business.

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, advised consumers to ask the gym about the lease of the outlet they intend to use before signing a package ("California Fitness shuts Raffles Place outlet"; Sunday). But this is not something front-line salesmen are in a position to know or, even if they did, to honestly disclose.

I also call for a ban on tie-in packages involving banks, where the full payment is made to the company and the debt transferred to the bank.

A Facebook group of victims that has been set up is replete with examples of customers who signed up or renewed with California Fitness just last week and must now continue paying the bank.

Such bank packages lead to salesmen sometimes fraudulently and exclusively promoting such payment methods, withholding information on the consequences as well as about other payment modes.

Christopher Low Kin Siong

A version of this article appeared in the print edition of The Straits Times on July 21, 2016, with the headline 'California Fitness gym closures: Get firms to insure packages over $500'. Print Edition | Subscribe