Hong Kong authorities arrest gym staff for using aggressive sales tactics

Hong Kong authorities have taken dramatic action against fitness centres for using aggressive sales tactics with the Chinese Administrative Region’s Customs and Excise Department advising that, as of Sunday 7th April, 14 people had been arrested on suspicion of engaging in allegedly illegal commercial practices.

Those arrested included two directors and 12 members of sales staff at gyms in Mong Kok and Yau Ma Tei.

The arrests follow the Hong Kong Consumer Council reprimanding four fitness centres for using aggressive sales tactics, citing examples of gyms forcing members to borrow from moneylenders to pay the fees while others were accompanied to ATMs or banks by gym staff to withdraw cash to pay their fees.

As reported by the South China Morning Post, one example saw a member pay out almost HK$2 million (US$255,000) in four months.

The four centres in question were SML Studio, Fitness Express Company and A Plus Fitness, all in Mong Kok, and Legend Fight and Fitness in Causeway Bay.

Explaining the techniques, Consumer Council Chief Executive Gilly Wong Fung-han advised “(sales staff) would listen in to the conversation (with the moneylenders), aiming to find out the limit a customer could borrow and the total amount of their assets, to create a personal package.”

Antonio Kwong Cho-shing, chairman of the Council’s trade practices and consumer complaints review committee, said the four centres were just the tip of the iceberg, adding “the named centres represent only part of the problem in the industry.

“Unscrupulous sales practices adopted by these fitness centres have shown the inadequacy of the existing Trade Descriptions Ordinance in protecting consumers.”

Kwong advised that a general approach would involve staff asking a complainant to fill out a questionnaire - often appealing for sympathy with claims it was their last of the day - before luring them to a nearby centre.

Once inside, the sales team would take over and coax the targets to hand over their credit and ID cards, with the intention of drawing up a contract and transferring funds.

Kwong said 90% of the complainants were under 25 years old, some mentally disabled. The complaint cases involved around HK$40,000 (US$5,000) on average.

The most extreme case involved A Plus Fitness, in which a 42-year-old complainant who suffered from white matter lesions, which affects the brain, was lured to the centre.

Over a period of four months, she bought a 15-year membership and 1,050 private coaching sessions, reaching a sum of HK$1.75 million (US$223,000).

She was also persuaded to borrow about HK$600,000 from a moneylender after reaching her credit limit.

The Council said 237 complaints were filed against the four fitness centres from January 2018 to February 2019, of which 67 were referred to or directly reported to customs.

SML Studio, Fitness Express and Legend all opened for business in 2018 while A Plus Fitness started operating in 2017.

In 2018, the Consumer Council received 160 complaints against the four fitness centres involving HK$6.78 million (US$863,700).

In the case of SML Studio and Fitness Express Company, all the complainants were under 25.

According to the Council, SML Studio received 99 complaints, the most of the four centres, and refused the council’s attempts at reconciliation.

Complaints about sales malpractice have continued to rise, increasing by 88% in 2018 - 415 cases from 221 cases in 2017.

Wong advised people to keep a closer eye on how young or mentally disabled family members spent their money, concluding “if they’re on the streets and are urged to fill out questionnaires for the sake of kindness, please stop them.”