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Home Rulings THE GYM COMPANY MEMBERSHIP / M A KHAN & ANOTHER / 2018-7208F

THE GYM COMPANY MEMBERSHIP / M A KHAN & ANOTHER / 2018-7208F

Mr and Ms Khan lodged consumer complaints against the Respondent’s billboard advertisements promoting The Gym Company’s membership in and around Southdale, Rifle Range Road and Robertsham/ Crown Garden, Xavier road, Ormonde, and Winchester Hills South of JHB.

The advertisements state, "R99 a month! 10 Jozi gyms to choose from! Limited offer / T’s & C’s apply”.

COMPLAINT

The First Complainant submitted that after signing up, he realised that the monthly fee is not R99 but R199. He was then told that the offer is no longer available and has changed to R199. He submitted that it is unacceptable as all billboards are still currently posted with this offer and not the R199 offering.

The Second Complainant submitted that she finds the Respondent advertisement misleading as the billboards still that state the R99 package is available, when in fact it is not. The second Complainant submitted that she is aware that the Respondent had two options, namely the R99 pm which is specific to one branch and the R199 which is access to most branches. She was, however, told that the offer of R199 is no longer available and was replaced with the offer of R299. 

RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE

In light of the complaint the following clauses of the Code were taken into account:
  • Section II, Clause 4.2.1 - Misleading claims
  • Section II, Clause 19 - Pricing policy


RESPONSE

The respondent was provided with a copy of the complaint and ASA correspondence requesting a response. However, despite repeated attempts to obtain a response, no response was received. As a consequence, the Directorate had no option but to rule on the matter based on the information it has at its disposal.

ASA DIRECTORATE RULING

The ASA Directorate considered the relevant documentation submitted by the complainant. 

Jurisdiction

In The Advertising Standards Authority v Herbex (Pty) Ltd (902/16) [2017] ZASCA 132 the Supreme Court of Appeal found, inter alia, that:

1.1 the Advertising Standards Authority of South Africa (the ASA) has no jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it;
1.2 the ASA may consider and issue a ruling to its members (which is not binding on non-members) on any advertisement regardless of by whom it is published to determine, on behalf of its members, whether its members should accept any advertisement before it is published or should withdraw any advertisement if it has been published.

The ASA will therefore proceed to consider this matter for the guidance of its members.

Merits

Clause 4.2.1 of Section II states that "advertisements should not contain any statement or visual presentation which, directly or by implication, omission, ambiguity, inaccuracy, exaggerated claim or otherwise, is likely to mislead the consumer”.

In this instance, Complainants submitted that the advertised offer of R99, 00 a month was no longer available and the actual offer was R199. Despite being afforded an opportunity to respond to the merits, Respondent chose to ignore the complaint. The absence of any response from the Respondent means that the Directorate has nothing before it to contradict Complainants’ submissions.

It would appear that whereas the previous pricing structure was R99 a month for one gym, and R199 a month for access to all, it is now R199 for one gym and R299 for all.

The advertisements clearly state "R99 a month”. This claim creates an impression that consumers can access the Respondent’s facility monthly at the advertised subscription.   The "T’s & C’s apply” disclaimer is of no consequence as the impression already created is that the subscription is R99,00. 

Clause 19 of Section II states, inter alia, that when any indication of cost is given in an advertisement, the selling price must include all necessary or incidental costs without which the product cannot or may not be purchased. This can either be done by giving a fully inclusive price, or providing a breakdown of all further mandatory costs.  At the very least, however, advertisers are required to prominently advise consumers of the applicability of additional mandatory costs. 

In Family Fitness / W Opperman / 8404 (23 March 2007) the Directorate held, inter alia, that "when viewing the advertisement, the hypothetical reasonable person is likely to interpret it to imply that any person willing to pay R90,00 per month may join this gym. It further found that the disclaimer "Terms and Conditions Apply" would only suffice if it were a term or condition that a hypothetical reasonable person would reasonably expect.

In this matter, the advertisement states that membership is "only” R99 per month. This creates an overwhelming impression that the monthly cost of the Respondent’s memberships is only R99 per month. 

By virtue of this, the advertisement is misleading and in contravention of Clause 4.2.1 and also Clause 19 of Section II of the Code.

In light of the above finding, the respondent is required to:
  • Withdraw the advertisement in its current format;
  • The process to withdraw the advertisement must be actioned with immediate effect on receipt of ruling;
  • The withdrawal of the advertisement must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide; and
  • The advertisement may not be used again in its current format.

The respondent’s attention is again drawn to Clause 15.5 of the Procedural Guide, with a cautionary note that further unclear advertising may well result in additional sanctions being considered as catered for in Clause 14 of the Procedural Guide.

In addition, given that an adverse ruling has been made and the respondent elected not to respond, the Directorate will issue an Ad-Alert to its members informing them of the above decision, and requesting them not to accept the advertisement in question.

The complaints are upheld.

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