Premier Fitness Undisclosed Fees Investigation Successfully Concluded

Competition Bureau Reaches Settlement with Fitness Club Chain in Ontario

Ottawa, November 27, 2007 – The Competition Bureau announced that it has reached a consent agreement with Premier Fitness Clubs, resolving the Bureau’s concerns over some of the company’s advertising practices from 1999 to 2004. The agreement was filed today with the Competition Tribunal.

During the course of its investigation, the Bureau determined that Premier Fitness Clubs did not adequately disclose additional fees that consumers would be obligated to pay in some of its advertising of membership offers on the radio, billboards, storefront signs, and in newspapers and flyers. Consumers who were induced by free trial offers ultimately had to pay a mandatory “fitness assessment” and/or had to sign up for a one-year contract in order to receive the “free” 30-90 day trial offer.

As a result, the actual price of memberships was greater than what the advertisements led consumers to believe. This contravened the false or misleading representations provision of the Competition Act. Premier Fitness Clubs owns and operates 35 clubs in Ontario.

“The Bureau is committed to ensuring that consumers are not enticed to make purchases based on misleading information,” said Andrea Rosen, Acting Deputy Commissioner of Competition. “Truth in advertising is fundamental so that Canadians do not sign contracts or make purchases only to find that additional costs have not been disclosed.”

Following the Bureau’s investigation, Premier Fitness Clubs has voluntarily taken steps to correct its advertising practices in order to conform with the law. This cooperation, along with the consent agreement, have resolved the Bureau’s concerns without having to proceed with costly litigation.

Under the terms of the 10-year consent agreement, Premier Fitness Clubs is required to:

• pay an administrative monetary penalty of $200,000.00;
• publish a corrective notice in three Ontario daily newspapers (the Toronto Sun, the Toronto Star, and the Ottawa Citizen);
• display a corrective notice in its clubs and on its Web site;
• implement a new corporate compliance policy to cover its marketing practices; and
• not make false or misleading representations in future promotional materials.

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

For media enquiries, please contact:
Pamela Wong
Communications Advisor
External Relations and Public Affairs Branch
819-953-7734

For general enquiries, please contact:
Information Centre
Competition Bureau
819-997-4282
Toll free: 1-800-348-5358
TDD (hearing impaired): 1-800-642-3844
compbureau@cb-bc.gc.ca