In the wake of the abrupt closure of California Fitness' three outlets in Singapore recently, one question many gym members have is: How can I get a refund?
Reporter Goh Yan Han has some advice from lawyers and the Consumers Association of Singapore (Case).
There are several avenues that consumers may consider when a business closes suddenly, but lawyers said that the chances of successfully getting refunds are low.
The options include filing complaints with Case, the Small Claims Tribunal, or taking legal action against the company.
It is important to read the contract you signed with the company to find out what you are entitled to. Check for clauses on whether the company will issue refunds if all its branches close.
For a company which has closed only some outlets, consumers can seek advice from Case.
As Case is not a regulator nor an enforcer, it can only help to mediate between you and the company, said lawyer Rajan Supramaniam.
When it comes to lodging a claim with the Small Claims Tribunal, it is worthwhile only if the company is still operating, or listed as a live company according to the Accounting and Corporate Regulatory Authority.
If the firm has ceased operations and closed all its outlets , the chances of getting a refund through Case or the Small Claims Tribunal are lower, said lawyer Shashi Nathan.
After the Small Claims Tribunal accepts a claim that has been lodged, a date for a hearing before a judge will be set. Both you and the company should be present.
However, the Small Claims Tribunal cannot force the company to attend the hearing, but a judgment will be made regardless of whether the company is present.
The tribunal is also not responsible for enforcing the judgment, so while you may have won the claim, it is up to you to take legal action to enforce it, said Mr Rajan.
Another avenue to get refunds after a company has closed is to file a class-action suit with other affected consumers or file a civil lawsuit against the company. But lawyers warned that the legal costs incurred may outweigh the amount of money you are hoping to be refunded.
Should a company appoint a liquidator - such as in the case of California Fitness - there is no point trying to take legal action, said lawyer Amolat Singh. Consumers are unsecured creditors. This means that they are last in line to get paid as other debtors - such as investors and suppliers, and the liquidation firm itself - will have to be paid off first.
To better protect themselves, consumers could consider patronising companies under the CaseTrust accreditation scheme. CaseTrust- accredited companies have to follow guidelines that help protect consumers from sudden business closures or unfair practices.
• For a more detailed answer, go to http://str.sg/4TSZ