Highlights in this issue:

*** 4 tips to exercising your rights when it comes to gym contracts…
*** Don’t sign on the dotted line unless you’ve check these 7 clauses…
*** The only way to ensure you’re NEVER stuck in something you don’t need…

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From the pen of Karin Iten…

Dear Investment Academy Reader,

Can you believe it’s almost the end of the year?

There goes my New Year’s resolution of losing 10kgs in time for Bikini season. (And I’m sure I’m not the only one.)

You see, I hate the gym. Not because I hate working out, but because when I was still at varsity I signed a three-year gym membership and boy was I in for a shock when I tried to cancel it 18 months later. After months of yelling and aggravation, I just threw in the towel. I paid the whole amount and walked away licking my wounds. And I’ve never set foot in another gym…

The thing is, I’m not the only person who has a version of this “horror story” to tell. Ask around and you’ll find at least one person with a similar tale. And since beach holidays and New Year’s resolutions are just around the corner, this week I’m going to show you how to exercise your rights when it comes to your gym membership.

Here are 4 tips for getting out of a gym membership

Tip #1: Think it over…
Earlier this year, the Department of Trade and Industry’s Office of Consumer Protection (OCP) warned South Africans about to sign up with gyms and other fitness centres to “pay careful attention to the small print in the contracts”.

According to getclosure.com, this came after the OCP received a range of complaints about hidden consumer responsibilities and obligations in fitness centre contracts. It discovered that: “In some cases fitness centres had made use of pressure tactics to force consumers into entering long-term contracts. In others, consumers said they were not informed whether membership fees would be deducted on a once-off or monthly basis, and neither did the contracts disclose the duration of the consumers’ commitment to the fitness centre, with some contracts having been erroneously entered into for life.”

The moral of the story is obvious. Read your contract – clause by clause – and make sure you have a copy for your own records. According to the OCP, the biggest mistake most consumers make is not checking the exact terms of the document they sign. So here’s what you should be checking for before you sign on the dotted line:

*** A “cooling off period” of no less than five days (excluding the day you signed the contract).
*** The payment options – whether you’re paying in advance or monthly.
*** The length of your membership.
*** What you’re entitled to in terms of equipment usage – if you try to cancel because of poor service you’ll need to know exactly what your package included.
*** The renewal date of the contract. (This is very important when it comes to cancelling your membership.)
*** The “exit fee” the gym will charge if you break your contract.
*** A cancellation clause. “Depending on the gym franchise, the cancellation fee might be manageable or waived entirely, particularly if you have a specific reason to get out of the gym contract like a medical disability,” says ehow.com.

Tip #2: Filled with buyer’s remorse? Get out before the “cooling off” period expires
According to new regulations, every gym contract must have, at the very least, a five day “cooling off” period. This is the period in which you can cancel your membership without any penalty. (Note that most “cooling off” periods include weekends and public holidays.) So if you’re not sure you did the right thing, save yourself the hassle and cancel before this period expires.

Tip #3: Don’t terminate the debit order
Stories abound on the web of clients having such frustrating cancelation experiences that they simply close their bank accounts or terminate the debit order to deprive the gym of money. But doing this isn’t only risky, it entitles the company to sue you in court for the money you owe. And it could also ruin your credit rating.

Here’s the bad news, outside the cooling off period, it's usually very difficult to cancel a gym membership during the term of the contract assuming that a sufficient level of service is being offered. Unless you have a viable reason for cancelling – such as emigration or a hip replacement – chances are you’ll be slammed with a hefty “exit” fee – and that’s if they let you out at all.

Once the renewal period creeps closer, the only way to cancel your membership legally is to put it in writing and give the establishment 30 days notice. (Don’t forget to keep a copy of the letter.) Gyms can be “forgetful” about termination notices – so make sure you have clear records to contradict them and check with the bank that the gym’s no longer debiting your account.

Tip #4: If all else fails, consider an exchange
www.contractexchange.co.za acts as a virtual “meeting place” for South Africans looking to get in and out of their current contracts – be it gym membership, cell phone contracts or leases. When you post your contract on the site, anyone interested can contact you to carry out the remainder of the agreement through a legal transfer of ownership. But before you pick this option, check your gym provider will accept this as a viable option and whether they’ll charge you an admin fee. Registering on the site is completely free.

Here’s to your financial freedom,

Karin Iten
For the Investment Academy