Fitness First penalised for short-changing customers via surcharges

Written on the 26 September 2018 by Business News Australia

Fitness First penalised for short-changing customers via surcharges

Fitness First has paid a penalty of $12,600 after the Australian Competition and Consumer Commission (ACCC) found that the gym chain was excessively surcharging its customers on card payments.

The ACCC issued an infringement notice against Fitness First after it investigated concerns against the company's flat fee surcharge on memberships paid by direct debit from credit, debit and EFTPOS cards.

The watchdog discovered that between December 2017 and 5 April 2018, Fitness First had imposed a $0.50 flat fee on these memberships, however the fee exceeded the cost of processing the payments by as much as 0.28 per cent.

ACCC deputy chair Mick Keogh says although Fitness First were within their rights to impose a surcharge, the fee amounted to more than is legally allowed.

"While there is nothing to prevent businesses from imposing flat fee surcharges if they wish, they must ensure the surcharge amount does not exceed their cost of acceptance for any given transaction," says Keogh.

"Where a transaction is processed for a smaller amount, a flat fee surcharge can often become an excessive surcharge. This highlights the issues faced by businesses if they decide to impose a flat fee surcharge.

"Businesses charging excessive payment surcharges, intentionally or not, do so at the risk of breaching the Competition and Consumer Act. The onus is on businesses that choose to impose surcharges to get it right."

Fitness First is the latest company to be penalised in a recent string of excessive surcharge cases investigated by the ACCC.

In November 2017, Red Balloon paid four similar infringement notices for excessive surcharging across four payment methods.

More recently in July 2018, Cruisin Motorhomes and Europcar also paid infringement notices for excessively surcharging their customers.

The ACCC has confirmed that Fitness First cooperated with its investigation and, after being made aware of the watchdog's concerns, took steps to review and amend its policies.

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