Hong Kong customs arrest 2 directors of gym chain Physical after authorities receive more than 2,600 complaints
Hong Kong Free Press
Hong Kong customs officers have arrested two directors of the gym chain Physical Fitness after the company abruptly closed last week, as law enforcement authorities and the city’s consumer watchdog racked up some 2,600 reports.
Citing high rents, Physical abruptly closed 23 fitness and health centres citywide last Friday, leaving customers with gym memberships and fitness plans that they could not use.
The company claimed the closures were temporary, and that new investors would allow customers to use the fitness plans and beauty treatments they had paid for.
Head of Unfair Trade Practice Investigations Rachel Fong said on Wednesday that the Customs and Excise Department had received 900 reports as of Wednesday noon, with claims involving more than HK$38 million in prepaid fitness and beauty services, ranging from HK$1,000 to HK$1.8 million.
The police separately received 20 reports from the public over payments for gym memberships, personal training sessions, and beauty treatments ranging between HK$2,000 and HK$660,000, Superintendent Eddie Chow of the police’s Commercial Crime Bureau.
The government has also set up an inter-departmental investigation team to handle the cases. Customs and the police will investigate unfair trade practices and potential criminal offences. Those who violate the Trade Descriptions Ordinance face a maximum penalty of a HK$500,000 fine and five years in prison.
Trade description laws
Fong said customs officers were in touch with more than 500 cases and had learned that Physical was behind on rent payments before it closed.
Based on preliminary investigation results, Physical had sold prepaid fitness and beauty plans to customers a day before it announced its closure on September 6.
The company is suspected of wrongly accepting payment, an offence under the Trade Descriptions Ordinance, Fong said, adding that the ongoing customs investigation would look into the gym chain’s operations and financial situation.
Customs on Tuesday arrested gym’s two directors, a 67-year-old man and a woman aged 68. According to an annual return filed in August, Physical’s co-directors are named Luk Ngai-keung and Ho Yuk-wah. Local media have reported they are husband and wife.
Chief Executive of the Consumer Council Gilly Wong told RTHK on Wednesday morning that the watchdog had received 1,725 complaints involving a total amount of about HK$60 million, including one claim worth HK$1.86 million for 1,900 personal training sessions lasting into the year 2050.
Wong said one customer was coerced into signing multiple 10-year contracts in 2016, including one that would start in 2037. She added that the gym chain had to bear full responsibility to clarify whether there is an investor taking over the business and how customers could be refunded if they were dissatisfied with the new arrangements.
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