Gym fined for pumping up carbon tax claims

Date
    August 1, 2012


A fitness gym has become the first company to be fined for making false claims about the impact of the carbon tax.   

Genesis Fitness Club Berwick, in Melbourne, has paid an infringement notice of $6600 relating to claims made about the cost of membership fees, the Australian Competition and Consumer Commission has confirmed.   

Genesis has gyms all around Australia and describes itself as "one of Australia's premier fitness organisations".

In April, the Berwick club sent a letter to more than 2100 members promoting a "rate freeze". The letter offered a range of contract extensions at current or reduced rates, suggesting that by taking up this offer, members could avoid a fee increase of 9-15 per cent due to the carbon price. 
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It is understood that more than 200 people took up the offer and extended their gym contracts.   

Today, ACCC chairman Rod Sims said that the ACCC believed GFC Berwick did not have a reasonable basis for their carbon tax claim.

"We are concerned that the false claims about the carbon price may have encouraged these people to sign lengthy contract extensions they otherwise would not have."   

Mr Sims said that businesses were free to set their prices as they saw fit, but said carbon tax claims needed to be truthful and "have a reasonable basis".

The company that manages the GFC franchise network has already written to affected members and offered to break their contract extensions at no cost.

Last month, the parent company of the Brumby's Bakery franchise apologised for "foolish and ill-considered" advice that encouraged bakeries to put up prices and "let the carbon tax take the blame".

The consumer watchdog looked into Brumby's about potentially misleading claims about the tax – but then accepted a court-enforceable undertaking from Retail Food Group, owner of Brumby's, that it would not engage in similar conduct in the future.

If the ACCC finds there has been wrongdoing, it can issue warning letters, infringement notices of $6600, or take court action with fines up to $1.1 million.   

Before it was implemented on July 1, the government warned businesses not to make misleading claims about the carbon tax.   

Read more: http://www.theage.com.au/opinion/political-news/gym-fined-for-pumping-up-carbon-tax-claims-20120801-23eb7.html#ixzz22G4V9bse