Premier Fitness leads in gym complaints: report

Premier Fitness leads in gym complaints: report

Marketplace investigation indicates many Canadians pay club fees needlessly.

Last Updated: Friday, January 7, 2011 | 8:49 PM ET Comments101Recommend112.

CBC News

Ontario-based Premier Fitness, one of the country's largest private fitness chains, also came out as a leader when CBC-TV's Marketplace asked consumers about overcharging by gyms.

The biggest issue to emerge from a national survey is that Premier continued with automatic withdrawals from bank accounts or charged the credit cards of many consumers who said they had already cancelled their memberships.

Ontario-based Premier Fitness was the leader when Marketplace asked consumers about being overcharged by their gyms. (CBC)As well as the Marketplace survey, a cross-country poll on private fitness facilities was conducted by Ipsos-Reid on behalf of the show. It found that 39 per cent of people who joined a fitness club said they had issues with overcharging. The poll, conducted online between Oct. 12 and 18, included a total of 2,004 adults, of whom 738 were current or former gym members.

Based on the poll and feedback from survey respondents, it's estimated various Canadian fitness businesses have taken half-a-billion dollars from consumers in overcharges over time.

Toronto resident Norm Jezioranski, one of the consumers who spoke to Marketplace, continued to be charged by Premier for three years after he cancelled his membership at the company's Davenport facility.

He even went to small claims court for the more than $2,000 he said the gym owed him, and won. But the gym didn't pay up.

'Honestly, I almost feel like these fitness clubs are above the law.'
—Norm Jezioranski, former member of Premier Fitness"Apparently when a judge orders you to do something, there's a lot more that you can do in terms of dragging your feet," he told Marketplace.

"Honestly, I almost feel like these fitness clubs are above the law," he said.

When Jezioranski made his final trip to small claims court, no one from the gym showed up. However, following the Marketplace investigation, Jezioranski received a cheque for $2,100 from Premier.

Pays by cheque
Danielle Marchese of Burlington, Ont., never expected to find unauthorized charges coming out of her bank account after she paid by cheque for her membership at a Premier facility in the city.

Danielle Marchese of Burlington, Ont., was surprised to find money being taken from her account under the name of P-S-C. (CBC)"Sometimes it happens. People have unauthorized payments coming out of their accounts so I thought, 'Oh OK, I'll pay by cheque. That won't happen to me, I'll pay in full."

However, after cancelling her membership, Marchese noticed a charge coming out of her bank account every two weeks, under the name P-S-C.

She went to her bank, assuming that it was some kind of service charge.

"They said, 'That's not us, it's your gym.' So I don't belong to a gym anymore and they said, 'Yup, yup.' And they actually were not surprised because I guess it's happened to a lot of people."

'They said, 'That's not us, it's your gym.'
—Danielle Marchese, former Premier Fitness memberMarchese set up an appointment to meet the manager of the gym to try to recover the $200 that had been taken from her account.

The manager didn't show up. Instead, she met with a sales representative, and Marketplace was there too, with a hidden camera.

During the discussion, the sales rep admitted there had been billing problems at the gym.

"It has happened. I'm not going to sit here and play like it hasn't. It has," she told Marchese.

During an interview, an official with Premier said it had no proof that Marchese had ever cancelled her membership.

Noticed 'real strange activity'
Marketplace also discovered that when signing up for a membership, cash doesn't cut it, because what Premier Fitness really wants is a customer's bank information.

'I sent up requests for cancellation, but it wasn't done.'
—Craig Thompson, former Premier Fitness managerWhen customers pay in cash, they're still asked to leave banking information. Otherwise, according to salespeople with the gym, they won't get a commission.

Former trainer and Premier Fitness manager Craig Thompson says he saw a similar pattern at all four of the company's locations where he worked.

Former Premier Fitness manager Craig Thompson said he would send cancellations to head office, but often they would not be processed in a timely fashion. (CBC)"Started noticing some real strange activity, like mainly the cancellations," he told Marketplace. "I knew I sent up requests for cancellation, but it wasn't done. And it would just sit there for maybe three, four months, and then they would cancel it."

"It made no sense to me," he said.

Thompson couldn't get any answers from head office when he complained on behalf of his customers.

"We call the office and there's no answer. We don't get a response because I guess we're not really supposed to know."

Premier partner denies wrongdoing
Neil Proctor, a partner in the Premier Fitness chain, bristles at any suggestion the company is doing anything wrong.

"I'm disappointed in the picture you're trying to paint of our company," he told Marketplace 's Tom Harrington.Premier Fitness partner Neil Proctor says the company has done nothing improper. (CBC)
"We cancel 35,000 people per year. We process the paper, we cancel people — 35,000, that's a lot. That doesn't indicate to me a company that doesn't cancel people. It's ridiculous."

However, the company's practices were enough to catch the attention of the Hamilton police fraud squad in 2004, when the unit was headed by Mark Simchison.

"We had reams and reams of information from consumers who had been victimized," he told Marketplace.

"I mean that got our backs up and said, 'OK, is this a glitch in the system or is this fraud?'"

The case was eventually dropped because the police couldn't prove that anyone at Premier had issued a directive to keep charging customers after they had cancelled.

Proctor defends the company's record, as well as its practices, including using only the initials P-S-C on bank charges.

"What you're insinuating is that it's vague and people wouldn't notice it," he told Harrington. "My answer to that is, if you read your bank statement and there's something on there that you totally don't understand, you ask and find out."

'No intent ever to bill people improperly'
On the need for a customer's banking information — even when a person pays upfront in cash — Proctor explains it as a contractual issue, that allows people to secure a favourable rate.

Former police officer Mark Simchison, who investigated Premier Fitness, says: 'We had reams and reams of information from consumers who had been victimized.' (CBC)"We've contracted to do something, we need billing information to carry out that contract," he said. "It's for no other purpose other than to facilitate the contract that our member has asked us to enter into with them.

"There's no intent ever to bill people improperly, to bill people without their authorization, to hold, to not process their cancellation. It's absurd," he said.

Proctor said anyone who has issues with the fitness centre should first go to the club and speak to the manager. If the consumer is still not satisfied, he or she can talk to head office.
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