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First business fined for false carbon claims

Genesis Fitness Club (GFC) has been penalised by the consumer watchdog for using the carbon tax as an excuse to increase membership fees, making it the first business in the country to be fined after the ACCC was given extra funds by the Government to crack down on false carbon claims.

The Berwick fitness club was forced to pay a $6,600 infringement notice after it made unfounded claims about the carbon tax’s impact on membership costs.

In April, the gym offered a ‘rate freeze’ to all of its members which would give them a lengthy contract extension at current or reduced membership rates. GFC Berwick claimed that the rate freeze would enable members to avoid a fee increase of 9-15 percent, which would come into effect with the carbon tax.

More than 200 members took up the gym’s offer and extended their contract as a result of the claim.

“The ACCC believes that GFC Berwick did not have a reasonable basis for claiming the carbon price would increase the cost of gym memberships by 9-15 per cent,” explained Australian Competition and Consumer Commission (ACCC) chairman Rod Sims.

He said that the false claims about the carbon price may have encouraged members to sign lengthy contract extensions that they otherwise would not have.

The infringement notice, which was issued to GFC Berwick for contravening consumer protection laws, was the first infringement notice associated with the carbon tax.

“Businesses are free to set their prices as they see fit but must carefully consider the basis for making carbon price claims and ensure such claims are truthful and have a reasonable basis,” said Sims.

In an attempt to resolve the matter, Genesis’ CEO wrote to all affected members, on behalf of GFC Berwick, offering them the opportunity to withdraw from the contract extensions at no cost.

“This is a good outcome for consumers that may have been misled by the claim. The ACCC welcomes efforts by businesses to be open and transparent with consumers,” Sims said.

For information on your rights and obligations, when making claims about the impact of the carbon price, visit www.accc.gov.au/carbon.

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Carly McKenna

Carly McKenna

Carly McKenna is currently working as a journalism intern for Dynamic Business. She is also a third-year Media student at Macquarie, a music enthusiast, and a lover of all things literary.

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