With the South African Government trying to combat the spread of COVID-19, fitness centres (and similar businesses) were forced to keep their doors shut.
During the pandemic, most consumers were able to save on gym membership fees that were not subtracted from the consumer’s account and have even considered cancelling their subscription/membership due to factors such as job losses, salary deductions or merely because the service or membership has become redundant.
Section 14 of the Consumer Protection Act, 68 of 2008 creates the right for a consumer to cancel a fixed-term agreement at any time before the termination date. However, this is subjected to the requirement that the consumer must do so by providing the business (gym) with 20 business days’ notice of termination.
The consumer also needs to take note that the business (gym) may request that all outstanding payments be paid (thus if you missed 2 or 3 premiums) and may charge a reasonable cancellation fee.
The following factors will be considered to determine the reasonableness of the cancellation fee (only applicable to services fixed-term contracts – refer to Regulation 5(2) for further factors outside the scope):
- The amount which the consumer is still liable for up to the date of cancellation;
- The value of the transaction up to cancellation;
- The duration of the consumer agreement as initially agreed;
- Losses suffered or benefits accrued by the consumer as a result of the consumer entering into the consumer agreement;
- The nature of the goods or services that were reserved or booked;
- The length of notice of cancellation provided by the consumer;
- The reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and
- The general practice of the relevant industry.
Section 14 of the Consumer Protection Act provides flexibility to the consumer. The Act clearly stipulates that the consumer may opt-out of his/her contract. They must however still be aware that a reasonable penalty fee may be imposed.
For more information regarding fixed-term contracts contact your SEESA Consumer Protection & POPI Legal Advisor, alternatively leave your details on our website at www.seesa.co.za.
About the Author:
Frikkie du Plessis stared his career at SEESA in May 2018 and is currently a Consumer Protection and POPI Legal Advisor at the SEESA Pretoria office. He obtained his BCom Law and LLB degree at the University of Pretoria. He was admitted as an Attorney of the High Court in 2017.
Resources:
The Consumer Protection Act, 68 of 2008