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Edith Lin

Harvey Kong

Danny Mok

Hong Kong authorities have set up an interdepartmental team to investigate the closure of a major gym chain, which has resulted in nearly HK$60 million (US$7.7 million) in prepaid fees from customers being left in limbo.
The government said on Tuesday night it was highly concerned about the closure of the 38-year-old Physical gym chain last week, while the Consumer Council had received 1,725 complaints from its customers so far, involving HK$59.9 million, or an average of HK$34,700 per case.
The highest amount involved in a single case was HK$1.82 million.
Customs and police had also received 733 and 19 complaints respectively relating to the chain.
“Hong Kong customs and the police will conduct an intensive investigation into offences under the Trade Descriptions Ordinance with respect to the unfair trade practices and whether other criminal offences are involved respectively,” the government said.
“Should there be any violation found, the authorities will take appropriate enforcement action.
The Commercial Crime Bureau set up the task force to investigate alleged fraud and offences relating to making false statements in connection with the chain’s closure.
Members of the public can report information through police’s hotline at 2860 5012, customs’ hotline at 2545 6182, via email at crimereport@customs.gov.hk or through an online form (eform.cefs.gov.hk/form/ced002).
Earlier the day, politicians and experts said that Hong Kong should learn from other countries in regulating the sale of prepaid services to improve its “very backward” laws and better protect consumers.
In calling for better ways to protect consumers, lawmaker Doreen Kong Yuk-foon cited figures released by the council, which had received about 7,700 complaints about prepaid services over the past three years, amounting to around HK$200 million.
She argued protection offered under the Trade Descriptions Ordinance was insufficient to safeguard consumers’ rights to prepaid services, noting the city lagged far behind some other jurisdictions.
“We are very backward. If we do not act, it will affect the service industry and consumers will lose confidence in the sector,” Kong told the Post.

The gym chain was known for the relatively low prices of its packages, with long-term contracts that offered 30-year or even lifelong memberships. But insiders said the fitness centre was also heavily reliant on customers signing up for classes with personal trainers, also offered as packages, for revenue.
Kong referred to the Fitness Services (Pre-paid Fees) Act in New South Wales in Australia, saying it offered consumers the best protection. The state law stipulates that fitness companies cannot ask for a prepayment for more than 12 months, nor seek a prepaid service for a period that exceeds its lease period on a space, unless the consumer is informed and consents.
She added that the legislation also requested that fitness centres hold prepayments in trust accounts before starting to provide services, which would enable them to issue refunds in the case of closure.
Yau Tsim Mong district councillor Chan Siu-tong, who helped some trainers claim unpaid wages from Physical and also accompanied a few as they made police reports against the company on Monday, also said the government should review its legislation and “plug the loopholes” in prepaid services.
Kelvin Kwok Hiu-fai, an associate professor at the faculty of law at the University of Hong Kong, said the city had an urgent need to introduce a cooling-off period as proposed by the government in 2019.
The proposal, which applied to some fitness centres and beauty salons, called for a cooling-off period of up to seven working days, during which customers could terminate the deal, and a refund period of seven or 14 working days.
Kwok added that contracts issued by some fitness centres covering an extended period of time could be a cause for concern. Britain, for instance, currently required gym contracts to be no longer than one year without a right to terminate, he noted.
“However, whether consumers are relying on cooling-off periods (if available) or Trade Description Ordinance provisions, it may be too late by the time the gym shuts down – it may be hard for consumers to get back their money,” he said.
Kwok said more criminal prosecutions were necessary to deter businesses from engaging in any unscrupulous practices.
University of Galway College of Business, Public Policy and Law executive dean Geraint Howells said a cooling-off period could be useful if people had been pressured into contracts, later realised they had made a rash decision or found the service not as good as promised.
A spokesman for the Commerce and Economic Development Bureau said it had noted unfair trade practices for prepaid services, particularly by fitness centres and beauty parlours using aggressive sales tactics.
But the spokesman said the bureau was still reviewing the cooling-off period proposal following a public consultation in 2019, with time needed because of significant changes in the social and economic environment since then.
The Labour Department said that as of noon on Tuesday it had received requests for help from about 540 Physical employees seeking to claim unpaid wages or wanting to address other employment rights issues.
Physical said on Sunday that one of its branches in Wan Chai would reopen under another brand, “Healthy” after a deal was reached with investors, with rumours suggesting it would open its doors on Tuesday.
But a Post reporter visiting the location on Tuesday morning did not see any staff members or customers entering or leaving the premises at around 7am, the usual opening time for gyms as stated on Physical’s website.
The lights of the branch were switched off and there was no indication it was in operation.
Lifts and doors leading to the gym remained blocked, with notices from the Customs and Excise Department pasted on some of the centre’s signage informing the public that a task force had been set up to look into Physical’s closure.


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Consumer protection in Hong Kong

Hong Kong authorities set up interdepartmental team to investigate closure of Physical gym chain

There was no indication that a Wan Chai branch Physical said would be reopened under a new name was operational on Tuesday. Photo: Sam Tsang

Lawmaker Doreen Kong says Hong Kong must look to emulate laws used in other jurisdictions, such as New South Wales in Australia, to better protect consumers. Photo: Edmond So

Ex-employees file police reports against Hong Kong’s Physical gym as complaints balloon

Hong Kong customs has posted notices outside Physical Health Centre’s Wan Chai branch. Photo: Elson Li

Four fitness trainers formerly employed by Physical Health Centre head to Tsim Sha Tsui Police Station alongside community officer Leung Chun-kit (centre) of the Business and Professionals Alliance for Hong Kong. Photo: Jelly Tse

Hong Kong watchdog handling 521 complaints involving HK$17 million against Physical gym chain

Customs posted a letter on the chain’s sign saying it is investigating the chain’s sudden closure. Photo: Elson Li

Physical Health Centre had as many as 23 outlets at its height. Photo: Jelly Tse

Hong Kong’s Physical fitness chain says branch will reopen thanks to new investor

Physical Fitness Centre announced earlier this week that it would be “temporarily” closing. Photo: Jelly Tse

One of the fitness centre’s branches in Lok Fu Plaza. Photo: Jelly Tse

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Number of complaints hits 1,725 and amount in prepaid fees swells to HK$60 million


Number of complaints hits 1,725 and amount in prepaid fees swells to HK$60 million.


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