Federal Assistant Treasurer targets gyms and wellness apps in warning on 'subscription traps'

Picking up on a tactic often adopted by state fair trading and consumer affairs ministers and agencies, Federal Assistant Treasurer and Minister for Financial Services, Stephen Jones has released advice for consumers to “beware of New Year’s resolution subscription traps” singling out signing up to “the local gym, a meal‑kit provider or a wellness app” as part of a Federal Government “crack down on unfair trading practices that are ripping off Australians”.

Minister Jones’ New Year’s comment follow plans announced by Australian Prime Minister Anthony Albanese in October to protect consumers and suppliers by banning unfair trading practices under the Australian Consumer Law.

These practices include ‘dynamic pricing’ for concert tickets and ‘subscription traps’ for gym memberships, airline tickets, hotel rooms and online shopping.

Consultation on the planned legislation closed in December, with the Federal Government now working through stakeholder feedback.

However, Minister Jones’ new announcement goes beyond the planned legislation, urging consumers to exercise discretion, noting “these subscriptions or memberships should be just as easy to get out of as they are to sign up to”, adding “unfortunately, there’s been a rise in dodgy practices that make it almost impossible to unsubscribe.”

He goes on to say “before signing up, Australians should be alert to tactics that make it difficult to unsubscribe or free trials that automatically renew without any warnings.

“These practices could cost Australians hundreds or even thousands, while also wasting a lot of time jumping through maze‑like ‘unsubscribe’ hoops.

“We want people to be alert to these dodgy practices, but more importantly we want businesses to stamp it out altogether.”

Why single out gyms?
At a time when many Australians are considering taking up exercise to see through their New Year’s resolutions - a period often known as 'gym-uary' - Minister Jones’ comments appear to be designed to discourage people joining gyms and fitness facilities.

It is consistent with tactics adopted in past years by state fair trading and consumer affairs ministers and agencies prior to 2023.

One club owner, who asked not to be named, reacted by saying “when we are encouraging Australians to be active and initiative’s like AUSactive’s Fit For Office campaign seem to have convinced many MPs of the benefits the fitness industry brings, its really unfortunate to cop a cheap shot like this”.

In 2020, Australasian Leisure Management looked into a warning about gym contracts issued by the Queensland Office of Fair Trading.

We found that of over 15,000 complaints the agency received in the previous year less than 1% related to fitness club memberships, prompting the questioning over whether such warnings were disproportionate.

Since then, more groups have introduced 'no lock-in' contracts.

Image credit: Adobe stock.