Genesis Fitness club fined for false carbon tax claims

A Melbourne fitness club has become the first business to be fined by the Australian Competition and Consumer Commission (ACCC) for making misleading claims about the impact of the carbon tax.

The regulator fined Genesis Fitness Club, a Genesis franchise at Berwick in Melbourne's south-east, $6,600 for claiming the carbon tax could increase the cost of gym memberships.

In April this year the club offered more than 2,000 members a 'Rate Freeze' if they signed up for a range of lengthy contracts and extensions at current or reduced membership rates.

The letter told members that by taking up this offer they could avoid a fee increase of between 9 and 15% due to the carbon price.

The ACCC says the gym did not have a reasonable basis for the claims which the ACCC say encouraged more than 200 members agreed to lengthy contract extensions.

ACCC Chairman Rod Sims stated "we are concerned that the false claims about the carbon price may have encouraged these people to sign lengthy contract extensions they otherwise would not have.

"Businesses are free to set their prices as they see fit but must carefully consider the basis for making carbon price claims and ensure such claims are truthful and have a reasonable basis."

As part of the resolution of the matter, Genesis Fitness Club Chief Executive David Lowe, wrote to all affected members offering them the opportunity to withdraw from the contract extensions at no cost.

Sims added "this is a good outcome for consumers that may have been misled by the claim."

The ACCC has already taken action against two solar panel suppliers, a bakery group and a refrigeration contractor over misleading carbon price claims, but the Genesis Fitness is the first business to be fined.