Gyms face stricter rules

Fitness-center chains will be required to set aside a portion of member fees to safeguard consumers' rights if new regulations are passed by the government -- rules that might hinder gym owners from rapid expansion.

The regulations, expected to be passed next month, are the government's first official response to the financial troubles and closure of the Youth Camp Health Group's (佳姿健康集團) last location on May 20, which affected the chain's roughly 250,000 members, the Consumer Protection Commission said yesterday.

Youth Camp, Taiwan's first fitness-center chain, has debts of NT$1.3 billion (US$42 million). The opening of the firm's premium Taipei 101 Oxy Gym was the main reason behind its financial woes, company chairwoman Pure Tsai (蔡純真) said last month.

As Youth Camp is incapable of refunding membership fees, the Consumers' Foundation (消基會) applied for a court ruling last Friday on behalf of gym members, hoping that the company will be declared bankrupt.

Under the Bankruptcy Law (破產法), if a bankruptcy ruling is made, the court will appoint a management committee to formally take over Youth Camp, allowing all its creditors to take part in discussions over how the firm's assets should be distributed.

"We don't know how long it will take and how much each creditor can get. But it is better than doing nothing," Terry Huang (黃怡騰), the foundation's secretary-general, said early this month.

Huang's remarks pinpointed the lack of regulations to protect consumers. To rectify this, the government has decided to implement tighter restrictions.

Hwang Horng-chyuan (黃宏全), director of the legal affairs department of the Consumer Protection Commission, said that when gym members pay more than NT$50,000 for a membership of more than one year, gym operators will have to set aside the additional amount as reserves.

"Business owners can either work with financial institutions or place the required amount in trust in accordance with the Trust Law (信託法)," Hwang said at a press conference.

Once the new regulations are approved next month, they should take effect in August, at the latest, as part of Article 17 of the Consumer Protection Law (消保法), he said.

Candy Tang (唐雅君), director general of the Taipei Health Fitness Industry Association (台北市健身房公會), said the association has worked for nearly three years to reach a consensus with the commission so it can "facilitate healthy, carefree and high-quality developments for gym-goers."

Tang is also chair of Alexander Health Club (亞力山大俱樂部), the nation's biggest fitness-center chain.

"We have met with difficulties during discussions with other professional gym operators. But now that a consensus has been reached, I think this is actually good for the whole industry," she said.