Can more be done to protect consumers?
Will close to 50,000 Singapore members of True Fitness be left stranded?
Despite announcing expansion plans in China, Singapore-owned True fitness and wellness chain suddenly shut its clubs in Thailand and Malaysia – all within the same week.
On June 5, Mr Patrick Wee, Chief Executive of True Group fitness and wellness had announced expansion plans that include opening 20 new clubs in China over the next three years.
A possible stock exchange listing was part of his plans as well.
However, shortly after on June 9, all shutters for the True Fitness outlets in Bangkok and Malaysia were down.
The reason for the closure of the outlets in Thailand and Malaysia were attributed to “evolving market conditions” that made the businesses “no longer financially viable”.
Despite a company spokesman maintaining on Friday that its business as usual for the Singapore, China and Taiwan outlets, many were left feeling uneasy and worried that it was the California Fitness saga all over again.
What Happened With California Fitness
Previously, California Fitness had abruptly shut down all its outlets in Singapore in July 2016, and many of its members were left high and dry.
California’s practices were brought to light as some customers revealed that they had signed packages with the company just weeks before it closed.
Many of its furious customers had lodged complaints against the company but lawyers like Amolat Singh were not hopeful about getting the customers getting refunds.
“While (club) members can register their claims with the liquidator, there may not be any money to give to them.”
One cannot take legal action against it, once a company goes into liquidation, Singh continued.
The incident also brought up whether credit providers should be liable should consumer transactions fail to be seen through.
This is after claims that the banks had provided plans which offer to waive admin fees that encouraged people to sign up for California’s Fitness schemes, even shortly before the outlets closed.
History Repeating Itself?
Hence, it is unsurprising that many True Fitness members are worried about their memberships and the money that they have spent on it.
This has also led to some considering shorter term contracts in the future due to the fear of the gym closing down before their contracts have ended.
Perhaps it is time for companies like True Fitness who have contracts with customers to be more transparent and explicit about customers’ membership rights in the event that the business closes – even before the contract is signed.
Meanwhile, the company should address the fears of its customers in Singapore by offering more clarity on the current status as well as the protocol in the event of closure.
