Marketing of “No Contracts” and "No Enrollment Fees"

Although marketing of “no contracts” is an acceptable practice in various types of businesses, health spas operating in the state of Georgia are prohibited from using such language in their ads. The Fair Business Practices Act specifically states, “A written contract shall be employed which shall constitute the entire agreement between the parties, a fully completed copy of which shall be furnished to the consumer at the time of its execution and which shall show the date of the transaction and the name and address of the seller; provided, however, that no contract shall be valid which has a term in excess of 36 months.”  Therefore, billboards, flyers, window signs, yard signs, and other forms of marketing which contain the language, “No Contracts,” or language of similar import, are to be pulled from circulation or use immediately. CPD does recommend that facilities use language such as “No Extended Contracts” or “Month to Month Contracts.”  Please be aware that facilities which are found in violation of this statute may be subject to a civil penalty of up to $2,000 per violation as applicable under state law.

Enrollment fees versus Initiation fees

There has been an increase in the number of ads offering “No enrollment fees.”  Please be aware that any advertisement that contains this representation or one of similar import will be considered deceptive if consumers must pay any fee in order to initiate services with the gym. So, for example, a gym may not advertise “No enrollment fees” and thereafter assess an “initiation fee.”  Attempts to draw a distinction between fees that are assessed for similar purposes are deceptive.

Remember, it is a basic principle of truth in advertising law that it is deceptive to secure contact with consumers through false advertising methods, even if the true facts are made known to the consumers before they purchase any goods or services. CPD takes these issues seriously. If the Office has reason to believe that a gym is engaging in this type of advertising and sales practice, proper steps will be taken to ensure that consumers are not being deceived.