Misleading advertising provisions by the Competition Bureau are decided in a case against Goodlife Fitness.
Goodlife Fitness Club, a privately-owned fitness company which operates over 90 fitness clubs across Canada, agreed to concede to a consent agreement with the Commissioner of Competition on Feb. 9/05 after an investigation into its marketing practices by the Competition Bureau.
Upon complaints from consumers, the Bureau investigated Goodlife’s marketing practices and, specifically, representations it was making in advertisements in newspapers, flyers, billboards and storefront signs on the price of its membership to join its fitness club.
The Bureau felt that Goodlife failed to provide an adequate disclosure of all additional mandatory fees that consumers would need to pay, contrary to the misleading advertising provisions of the Competition Act. As a result, the Bureau felt that consumers were being misled as to the actual price of Goodlife’s membership which was higher than what was being advertised.
Even though Goodlife did not admit to contravening the Competition Act, Goodlife agreed to immediately resolve the matter by entering into a consent agreement with the Commissioner to remain in effect for 10 years avoiding any costly litigation.
The consent agreement provides that Goodlife must:
. cease making any representation that does not disclose all additional membership fees including, initiation fees, card processing fees, annual registration fees, dues and/or towel fees;
. ensure that any fine print in print advertisements and disclaimers be clearly readable and legible without having to resort to unusual means to read them;
. ensure that any print disclaimers in television ads be of duration long enough so that they can be read;
. pay a corporate administrative monetary penalty of $75,000.;
. publish a corrective notice in certain newspapers and on its Web site;
. devise a new corporate compliance policy on its marketing practices;
. refrain from making any false or misleading representations to the public in the future.