China Consumer Association Warns on Fitness Prepayment Risks

Beijing, July 6, 2026 — The China Consumer Association (CCA) has issued a consumer alert on fitness prepayment risks, advising consumers to follow a “Three Checks, Two Don’ts” guideline when selecting fitness institutions and recommending a trust-based fund supervision model to safeguard prepaid funds.

The warning, published on July 6, comes amid a deepening crisis in China’s fitness industry, where the dominant “pay first, consume later” model has left millions of consumers vulnerable to refund refusals, service degradation, and even outright fraud when gyms close or owners abscond with funds.

The ‘Three Checks, Two Don’ts’ Framework

According to CCTV News, the CCA urged consumers to follow a simple but rigorous checklist when choosing a fitness institution:

Three Checks:

1. Check credentials — Verify business licenses and coach certifications
2. Check operations — Evaluate the facility’s environment and scale
3. Check integrity — Research market reputation, social credibility, and whether the institution appears on industry blacklists

Two Don’ts:

1. Don’t blindly make large prepayments lured by “the more you充值, the bigger the discount” marketing tactics
2. Don’t purchase ultra-long-term prepaid cards such as “lifetime cards” or “five-year cards”

“Do not be tempted by marketing tactics of ‘the more you充值, the bigger the discount’ to blindly make large prepayments,” the CCA stated.

The Trust-Based Solution

A central feature of the CCA’s advisory is its strong recommendation of the prepaid fund service trust model, already implemented in Shanghai, Jiangsu, Jinan, Hefei, and other regions.

As Beijing Business Today reported, this mechanism leverages the core institutional advantages of trusts — “property independence and risk isolation” — by placing consumer prepaid funds in bank trust accounts supervised by trust companies. Funds are released to merchants only as services are actually consumed, following a “one disbursement per consumption” principle.

“Fully leverage the core institutional advantages of trusts — ‘property independence and risk isolation’ — by placing consumer prepaid funds in bank trust accounts supervised by trust companies. One disbursement per consumption, one receipt per merchant,” the CCA explained.

If a gym closes or declares bankruptcy, the trust company refunds the remaining prepaid funds to consumers, dramatically reducing the risk of financial loss.

Industry Crisis and Emerging Threats

The warning arrives as China’s fitness industry undergoes a massive restructuring. According to the “2025 China Sports & Fitness Industry Data Report,” the number of fitness studios in China plummeted from 43,232 in 2024 to 18,646 in 2025 — a closure rate of nearly 57%, representing approximately 24,000 studio closures.

The China News Service highlighted that the CCA specifically warned about emerging phenomena such as “professional store closers” — individuals who help failing businesses systematically shut down while evading consumer refund obligations — and “debt evaders” who assist business owners in transferring assets to avoid repayment.

“Traditional prepaid consumption cannot effectively isolate funds from risks. Operators arbitrarily misappropriate prepaid fees, refuse refunds, and even maliciously abscond with funds,” the CCA said. “New phenomena like ‘professional store closers’ and ‘debtors assisting in debt evasion’ make consumer rights protection even more difficult.”

Real-World Cases Illustrate the Problem

The CCA released five detailed consumer complaint cases alongside its advisory, illustrating common pitfalls:

• A Shenzhen consumer who purchased 38 private coaching sessions for 14,888 yuan was denied a proportional refund after completing only three sessions due to health reasons, with the gym demanding a 28% handling fee.
• A Shanghai gym induced an unemployed consumer to open a credit card installment plan for 14,000 yuan in boxing classes, then demanded a 32% cancellation fee when the consumer felt unwell after three sessions.
• A Haikou consumer spent 29,147 yuan on three private coaching packages after being promised dedicated one-on-one coaching, only to have the gym demand an additional membership purchase within two weeks and repeatedly change coaches.

Consumer Guidance

The CCA also emphasized that consumers must sign written contracts, carefully review terms regarding scope, validity, rights, obligations, and breach penalties, and retain receipts, chat records, and balance statements. Disputes should first be raised with the merchant; if unresolved, consumers can file complaints with local consumer associations.

Broader Implications

The advisory signals a policy direction toward institutionalizing consumer protection rather than relying solely on post-hoc dispute resolution. The promotion of trust-based prepayment models also represents a significant opportunity for China’s trust industry, which has been undergoing regulatory-mandated transformation away from shadow banking toward genuine service-oriented trust products.

As the fitness industry continues to evolve — with 24-hour smart gyms like Lefit thriving while traditional prepayment-dependent models collapse — the CCA’s guidance provides consumers with a practical framework for navigating an increasingly complex marketplace.

What to Watch For

Industry observers will be watching whether the CCA’s recommendation leads to regulatory mandates requiring gyms to use trust accounts, and how smaller fitness studios — which may lack the resources to set up trust arrangements — will adapt to any new requirements.