'Pilates King' losses under scrutiny at parliamentary audit; calls for safeguards for long-term prepaid memberships [2026 Parliamentary Audit]

[Financial News] Calls were made at a parliamentary audit to strengthen safeguards for long-term prepaid memberships and prevent harm caused by Pilates and yoga businesses suddenly closing or refusing refunds. It was pointed out that a system is needed to protect members' payments when a center changes hands or ceases operations.
At a comprehensive audit of the Ministry of Culture, Sports and Tourism (MCST) by the National Assembly's Culture, Sports and Tourism Committee on the 23rd, Rep. Kim Jae-won of the Rebuilding Korea Party (RKP) presented victims' testimony and the findings of his office's own survey, and called for preventive measures such as guarantee insurance for prepaid payments.■ 89.7% have recovered none of their losses... Testimony of centers changing hands one after anotherThe survey on the extent of harm had received 322 responses by the 21st, according to Rep. Kim's office. Of the 261 responses from members and consumers, 234 (89.7%) said they had recovered none of the money they lost. Among the 136 member and consumer respondents who had experienced a change in operator, 108 (79.4%) said they had not been informed in advance or had learned about it only after the change.
Hwang Jun-seon, head of the Pilates Victims' Group, appeared as a witness that day and testified that an operator known as the so-called 'Pilates King' exacerbated the harm by taking over around 10 centers across the capital region one after another.
“He took over centers before even paying the remaining acquisition balance and raised prepaid funds by selling large numbers of long-term memberships for around half the market price,” Hwang said, explaining that the same approach was repeated at other centers.
The victims' group estimated that around 1,000 members and about 50 instructors and employees were affected, with losses totaling about 2 billion won. “Even if a center suddenly closes, members' money must be protected,” Hwang said, calling for the introduction of guarantee insurance or an escrow system.■ Calls for guarantee insurance on prepaid payments and inclusion under reporting rulesKim said Pilates and yoga are excluded from the categories of sports facility businesses subject to reporting, making it difficult to monitor temporary and permanent closures, and that there is no requirement to take out guarantee insurance for long-term prepaid memberships. He called for improvements to the system.
The 'Standard Terms and Conditions for Yoga and Pilates,' established by the Fair Trade Commission in July, require businesses to notify members 14 days before a planned temporary or permanent closure and calculate refunds based on the amount actually paid. They also require businesses with guarantee insurance to inform members in advance of the type of insurance and its coverage, but use of the terms is only recommended.
“There are limits to punishing businesses only after harm has occurred,” Kim said, stressing that “institutional safeguards are needed to prevent harm in advance and stop second and third 'Pilates King' cases.”
Kim said he is also preparing amendments to the law to include Pilates and yoga among sports facility businesses required to file a report and strengthen protections for long-term prepaid memberships. Second Vice Minister Kim Dae-hyun of the MCST fully agreed with the intent of the legislation.
[email protected] Jang In-seo Reporter