Sun, May 26, 2013 02:55:30 AM
Bangkok Post
Sun, May 26, 2013 02:55:30 AM
Bangkok Post
Deciding to make a long-term commitment to regular exercise, office worker Yaowapa Chamrassomboon bought a year's subscription at a fitness centre in her neighbourhood. But instead of getting her trim and toned, the time she's spent at California Wow Xperience (CaWow) has left her stressed out, as well as severely out of pocket.
Earlier this year the 48-year-old went one step further and became a lifetime member at CaWow's Pin Klao branch, forking out in the region of 300,000 baht for membership fees and courses with a personal trainer.
A few months later, Yaowapa and thousands of other CaWow members were abruptly left in limbo when the company suspended services at 7 of its 8 branches in Bangkok. The firm is apparently in major financial difficulties and, in an attempt to stave off the receivers, has submitted a business-rehabilitation plan to the Central Bankruptcy Court for approval.
How a once very popular fitness club arrived at this juncture is a dark tale of aggressive marketing tactics, unscrupulous practices, false promises and employees under pressure to sign up clients or risk losing their jobs.
Under the business rehabilitation plan, which began in June, CaWow closed the doors at all of its Bangkok outlets except Siam Paragon. On its website, it blamed the move on the landlords of its various branches, saying they were not providing the necessary facilities. What CaWow failed to mention was that it hadn't been keeping up with its rent payments.
Members of the 7 shuttered branches were told that they could use the CaWow facilities at Siam Paragon _ provided, that is, they were willing to fork out an additional monthly fee. No thought seems to have been given to whether the sole remaining branch had the capacity to cope with the subsequent surge in the number of users.
Last week, Major Cineplex, the country's largest cinema operator, said that it was considering re-leasing space currently rented by CaWow at 4 of its shopping centres if the troubled firm proves unable to resume operations.
Originally opened in 2000 as a branch of California Fitness Center, the worldwide chain which targets a high-end clientele, the club struck out on its own in 2004, renaming itself California Wow Xperience and shifting its focus to the mass market.
Many may think it absolute insanity for someone to cough up several hundred thousand baht for a "lifetime membership" to a club with a track record of less than 10 years. But outsiders have no idea of the high-pressure sales tactics regularly used by CaWow staff who were not above using emotional blackmail to sell fitness courses on commission.
And Yaowapa is far from being the only person to fall foul of CaWow. She is one of 506 members (as of last week) who have sought legal advice from the Consumer Protection Foundation, an NGO, which estimates that a staggering 180,000 people around the country have joined CaWow, only half of whom are currently active members.
The foundation has urged anyone affected by CaWow's suspension of services to join in filing a collective complaint against the firm's management. Last Sunday, it hosted a forum as a platform for CaWow members to discuss with officials from the Bank of Thailand and the Consumer Protection Board, a government agency.
Of the 506 complainants currently registered with the foundation, only 300 individuals, more than half of whom hold lifetime subscriptions, were willing to reveal how much money they have handed over CaWow. The total comes to a whopping 21.6 million baht.
These people did not simply pay all this cash up front. The system worked this way: You were invited to a free trial session at CaWow, lasting from one to two weeks. But once you set foot in the club, it proved very hard to leave the place without making a firm commitment, so intense was the sales pitch. Most of those who went along for the free trial were persuaded to take out membership, the fee varying greatly, depending on the bargaining skills of each client.
While the membership fee was usually pegged at an affordable level, this was just the first of many demands on a client's wallet. Members were subjected to constant pressure to sign up for personal training (PT) courses, told that this was the only way to achieve their "goal" of having a perfect body. Then they were tempted by the prospect of big cash prizes to enter various in-house competitions. To be eligible to enter these, however, one had first to sign up for an additional PT course, supposedly designed specifically to coach you for victory in this or that contest.
"But we'd never hear who'd actually won those competition," said a member of the Ratchayothin branch who asked not to be named. On top of 200,000 baht for a lifetime membership and various PT courses, this woman forked out another 49,000 baht to enter a body-building competition held earlier this year. "The first prize was 300,000 baht, but we never found out who won it," she said, adding that she didn't even get the chance to complete that "special" PT course.
And many of the personal trainers at CaWow seemed to be doubling as company sale reps, according to several clients who said they were approached by these staffers on at least one or two occasions.
''And they wouldn't take 'no' for an answer,'' said Kedkavee Pavornrak, who's been a member of the Ekamai branch since 2007. While she was very satisfied with her yoga classes at CaWow, she said she stopped doing workouts with a personal trainer there because he spent the last quarter of their very first session trying to convince her to pay for another PT course.
''There was a definite pattern,'' she said. ''You might only be halfway through your current package or have already paid for a few others, but they keep trying to earn commissions by getting you to sign up for new courses.''
Her boyfriend, Surasak Kunanantakul, paid more than 600,000 baht over the past two years for about 500 hours of PT at the Ekamai branch. He is still owed for more than 200 hours of this, she said.
And you should consider yourself lucky, apparently, if you managed to finish a CaWow course with the personal trainer with whom you signed the original contract. Trainers who resigned midway through a course were rarely replaced and a client could only re-activate the unused portion of the course if he or she paid for another course with a new trainer. Since trainers earned commission on the signing of a PT contract, most were reluctant to take over half-finished courses on behalf of departed colleagues because there was little monetary incentive to do so.
CaWow trainers were under pressure to fill quotas, too. As a result, some customers signed up for several courses as a way to safeguard the job of a trainer of whom they had become fond. Like Yaowapa, most paid for these PT sessions with a credit card. Her trainer asked her to do him a favour by using her card to cover advance course fees for complete strangers, assuring her that he personally guaranteed all the payments. She subsequently paid 850,000 baht through credit card, a sum which her trainer has so far failed to return.
''I now know it was a big mistake. But back then, I felt pity for my trainer. If he couldn't meet his target at the end of the month, he would definitely get fired,'' Yaowapa said, reasoning that if he had been dismissed all the courses she had signed up for with him would have been nullified.
''They would do anything to get the money out of your pocket,'' said Kedkavee. ''Basically, they'd try to convince you to buy a lifetime membership. But if you couldn't afford that, they'd talk you into going for one of the cheaper options, like making monthly payments.''
Apart from all the course-hours her boyfriend's paid for and may now never get, Kedkavee also complained that he wasn't able to cancel a payment of 49,000 baht made to CaWow through his credit card for a service he may never get now that the Ekamai branch has closed its doors.
The Consumer Protection Foundation insists that since CaWow failed to meet its contractual obligations, its clients should not be responsible for paying any further instalments.
''These customers are under no obligation to pay the rest of their fees since the club cannot provide the facilities as stipulated in the contracts,'' said foundation official Sawanee Chumchalieo.
''Unless the club can re-open its outlets for members to use as indicated in the contracts, no member should be charged for the use of the only outlet [Siam Paragon] in operation,'' said Chalermpong Klubdee, head of the foundation's legal section. He suggested that members suspend all payments to CaWow until its operations return to normal.
The problem, as Kedkavee's boyfriend and other CaWow members have already discovered, is that banks and credit-card companies won't suspend payments on pre-agreed instalment plans unless they get authorisation from CaWow.
A ruling from the Central Bankruptcy Court is expected by the end of this month. If the court rejects the business-rehabilitation plan submitted by CaWow, the firm is likely to be forced to file for bankruptcy. Only at that point will members seeking reimbursement of fees be able to take legal action.
Since the mills of justice grind exceedingly slow, getting redress is sure to take them a lot longer than getting in shape.
