Gym Membership 'Automatic Payment' Trick... 'No Refund' Even Without Use [The Art of Consumption]

[Financial News]"You're saying I can't get a refund for this month when I haven't even used it yet?"Office worker Mr. A subscribed to a one-month membership at local Gym B through its mobile application last January and paid 66,000 won. He intended to decide whether to re-register after working out for just one month. However, as he did not request cancellation, the same amount was automatically charged again early the following month.
Mr. A, who was no longer able to use the gym due to personal circumstances, immediately requested the company to cancel his subscription and refund the February usage fee. However, the gym stated, "It is difficult to issue a refund once the automatic payment has been completed," adding, "Unless you cancel in advance, we cannot return the amount already paid." Mr. A found this decision difficult to accept, given that he had not even used the facility, and filed for damage relief with the Korea Consumer Agency (KCA).
According to the Korea Consumer Agency (KCA) on the 23rd, consumer disputes related to subscription payments are increasing as they spread into everyday consumer life. The core of this case was whether a business operator could unilaterally refuse early termination and a refund solely on the grounds that automatic payment had been completed.
Article 35 of the Act on the Consumer Protection in Electronic Commerce and Article 52 of the ACT ON DOOR-TO-DOOR SALES stipulate that contract terms unfavorable to consumers, such as unfairly restricting a consumer's right to withdraw an offer or terminate a contract, must not be included. In the case of a contract in which services are continuously provided and payments are made, the consumer may terminate the contract midway, and in this case, the business operator must return the remaining amount excluding the actual usage fee and a 10% penalty fee according to established standards.
The Korea Consumer Agency (KCA) recommended improvements to Gym B, reporting that its terms and conditions stating that "refunds are not available for subscription users" and the structure of its mobile app restricted consumers' right to terminate contracts. The company accepted this recommendation, removed the relevant clause, and agreed to refund the amount excluding usage fees and a 10% penalty fee upon a request for contract termination. As a result, Mr. A received 45,000 won back.
The company decided to improve its system by providing a feature in the mobile app that allows consumers to directly cancel subscriptions, and by notifying them in advance of price increases through methods such as push notifications.
The Korea Consumer Agency (KCA) advised consumers to carefully check whether automatic payments are made, the payment cycle, and the cancellation and refund conditions when purchasing subscription products. An official from the agency stated, "Even if automatic payments have been made, users can request a refund for usage fees for the period after their intention to cancel the contract has been communicated to the service provider, in accordance with relevant laws." The official added, "If you do not intend to continue using the service, it is advisable to clearly notify the provider of your intention to cancel immediately and keep records to prove this, such as text messages or emails."
[email protected] Kim Hyun-ji Reporter