The country’s largest gym chain has been fined 1.12 million dollars after a court found it lured members in with an advertised price that did not actually exist, then quietly bolted on a compulsory fee designed to lift its own profit.
CityFitness, which runs 66 clubs nationwide and holds an estimated 40 percent of the New Zealand gym market, was convicted in the Auckland District Court on 9 June after pleading guilty to eight charges under section 11 of the Fair Trading Act. The charges, filed by the Commerce Commission in September 2025, centred on a 3 percent charge the company called a “transaction fee”.
For most members the headline number was 6.99 dollars a week, splashed across the company’s website, its Instagram account and its Google advertising. What new members were not told upfront was that a 3 percent fee would be added on top, a charge that, despite its name, had nothing to do with the genuine cost of processing a payment. Between 21 December 2023 and 30 April 2025 the fee was applied to more than 125,000 members and generated roughly 1.6 million dollars in extra revenue for the business.
In other words, the gym collected more from the hidden fee than it has now been fined for charging it, though the conviction and the reputational hit are likely to sting in ways a balance sheet does not capture.
Commerce Commission deputy chair Anne Callinan was blunt about what the regulator had found. She said the 3 percent fee “was designed to lift the company’s profit” rather than cover any real transaction cost, and that CityFitness “continued to advertise this price even after introducing a 3 percent transaction fee”. Her message to other traders was short. “Be honest with your customers,” she said.
Auckland District Court Judge David Clark was similarly pointed. He found the decision to use the misleading label had been approved at the highest levels of the company, and said CityFitness had “disregarded the rights and interests of potential members in preference to looking after its own commercial interests”. The court accepted the conduct prioritised marketing and competition outcomes over the protection consumers are entitled to expect.
The practice has a name that regulators around the world have come to know well. It is called drip pricing, where a customer is drawn in by a low advertised figure and then watches the real cost climb as compulsory extras are revealed one drip at a time during the sign-up. The tactic works because the first number is the one that sticks in a shopper’s head, and because by the time the additional charges appear, the customer has already invested time and attention in the purchase and is less likely to walk away.
For the Commerce Commission, the CityFitness case is less a one-off than a marker of where its attention is now fixed. Drip pricing sits squarely inside the regulator’s stated enforcement priorities for 2025 and 2026, alongside fake reviews, misleading scarcity claims and subscription traps that are easy to enter and hard to leave. The commission has signalled it is willing to spend heavily to make the point, budgeting to run over its litigation fund by a couple of million dollars to pursue cases it considers important. A seven-figure fine against the biggest player in a consumer-facing industry is exactly the kind of result that gets noticed across a sector.
It also lands at a moment when household budgets are stretched and every weekly direct debit is under scrutiny. A 3 percent surcharge on a 6.99 dollar membership is only a handful of cents a week to any single member, which is part of what makes the practice so effective and so hard for an individual to challenge. Spread across 125,000 people over more than a year, those cents added up to 1.6 million dollars. The economics of small, near-invisible fees are precisely why the law puts the onus on the trader to advertise the price a customer will actually pay, not the one that reads best in a social media ad.
Gym memberships have long been fertile ground for consumer complaints, from contracts that are simple to start and difficult to cancel to fees that appear without much warning. The CityFitness ruling does not change the rules so much as enforce ones that already existed, but it does set a price on getting them wrong. For a chain of 66 clubs, 1.12 million dollars is a manageable number. For a smaller operator watching the case, the lesson is that the advertised price and the price charged need to be the same price, with no quiet additions waiting at the checkout.
The broader question for shoppers is how many other everyday purchases carry a similar gap between the number on the ad and the number on the receipt. Booking fees, service charges, processing fees and assorted surcharges have crept into airfares, event tickets, food delivery and online retail, and not all of them survive close inspection against the Fair Trading Act. The commission’s signal is that it intends to keep testing them. For New Zealand consumers, the simplest takeaway from the CityFitness fine is to read past the headline price and check what the total actually is before signing anything.
You can read the Commerce Commission’s account of the case on its website, and coverage from RNZ and BusinessDesk.
Have you noticed hidden fees creeping into your own gym membership or other regular bills? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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