Busan City Reports Increase in Consumer Complaints Related to Indoor Sports Facility Contract Terminations

Consumer Complaints Related to Gyms, Pilates, and Yoga Show Annual Increase from 2020 to 2023

95.6% of Complaints Involve Contract Termination and Penalties, Urging Careful Decision-Making on Contracts

Busan City recently announced that due to the unilateral temporary closures and shutdowns of large Pilates companies headquartered in the Busan area, consumer damages in the Busan, Ulsan, and Gyeongnam regions are increasing, urging consumers to exercise special caution.

In May, Busan City held a forum on the topic of 'Consumer Disputes and Price Display System Establishment Measures for Gyms and Pilates Studios.'

It has been found that the terms and conditions used by some businesses in the Busan area are unfair to consumers, and urgent improvements are needed.

◆ Consumer damages related to gyms, Pilates, and yoga are increasing annually

From 2020 to May 2023, a total of 11,806 damage relief applications related to gyms, Pilates, and yoga were received by the Korea Consumer Agency (Director Jang Deok-jin), showing an increasing trend every year. Among these, consumer damage relief applications from the Busan area totaled 641 cases, also showing an upward trend annually.

▲ The most affected age group was people in their 20s and 30s, accounting for 80.2% (9,463 cases), and by category, gyms accounted for 80.4% (9,488 cases), followed by Pilates at 16.5% (1,948 cases), and yoga at 3.1% (370 cases).

▲ Most damages related to contract cancellations and penalty fees

By type of damage, 'contract-related' issues accounted for 95.6%, making up the majority. Specifically, disputes mainly involved businesses refusing contract cancellations and refunds upon mid-term cancellation requests or charging excessive penalty fees related to refunds. In the Busan area as well, contract-related damages accounted for 95.4%, the highest proportion.

▲ This is because there were many disputes between consumers and businesses over whether to calculate refunds based on the promotional or discounted price at the time of contract signing or the regular price presented by the business in the terms and conditions.

▲ Unfair terms related to 'contract cancellation and refusal or restriction of refunds' were the most common

Among 641 damage relief applications in the Busan area, an analysis of the terms and conditions of 210 companies that could be reviewed showed that 61.9% (130 companies) had terms refusing or restricting contract cancellations and refunds. Next were terms refusing or restricting transfers or name changes at 21.0% (44 companies), and terms imposing credit card fees on consumers at 18.1% (38 companies).

▲ A forum was held on the theme of ‘Consumer Disputes and Price Display System Establishment for Gyms and Pilates’

To prevent such consumer damages, in May, Busan City and the Busan Consumer Organizations Council (Chairman Jeong Chang-sik, hereafter ‘Busan Consumer Council’) held a forum on the theme of ‘Consumer Disputes and Price Display System Establishment for Gyms and Pilates’ with the participation of the Busan Office of the Fair Trade Commission, Korea Consumer Agency Busan-Ulsan-Gyeongnam Branch, Korea Fitness Managers Association Busan-Gyeongnam Branch, Korea Lead Pilates Association, Pilates365, and others.

At this event, the Fair Trade Commission decided to expand the display and inspection of important information such as usage fees and refund standards for sports facilities. Busan City and the Busan Consumer Council urged consumers to carefully decide contract periods to prevent disputes that may arise from mid-term contract cancellations. The Korea Consumer Agency recommended that businesses fully fulfill their obligation to provide information on refund regulations and improve unfair terms that are disadvantageous to consumers.

Shin Chang-ho, Director of the Digital Economy Innovation Office of Busan City, stated, “With the lifting of social distancing and the upcoming vacation season, interest in health is increasing, and consumer damages related to gyms are expected to continue rising, so special caution from Busan citizens is necessary.” He added, “We empathize with the difficulties businesses face due to recent increases in electricity and gas prices. The structure of recruiting long-term contract members through cutthroat competition to attract customers can cause issues such as penalty disputes and delayed refunds upon cancellations, so reasonable usage prices should be presented. Consumers should carefully check contract periods and conditions and make contract decisions prudently.”

This content was produced with the assistance of AI translation services.