06 Apr 2020
US gym operators facing lawsuits over membership fee collections during lockdown
BY Tom Walker
A number of US gym operators are facing lawsuits over their handling of membership fee collections during the coronavirus lockdown.
Town Sports International, 24 Hour Fitness and LA Fitness are among those facing class action lawsuits, after members said they had been charged for memberships despite their clubs being closed.
Members have also accused some operators of making cancelling memberships a "complicated process".
New York-based law practice Wigdor said it had filed a class action against Town Sports International (TSI) on 26 March on behalf of member Mary Namorato.
In a statement, the law firm said: "TSI has continued to charge its customers’ credit cards for monthly gym membership fees.
"Incredibly, TSI has made it virtually impossible for members to cancel their memberships.
"In stark contrast, numerous other gym brands such as Equinox, Planet Fitness and Blink Fitness have announced that gym membership charges have been frozen due to gym closures."
HCM has contacted TSI for a comment.
Meanwhile, budget operator 24 Hour Fitness has also been hit with a similar suit. Brenda Labib, a California resident, has filed a lawsuit in the state's courts, saying she had been charged for her membership after her 24 Hour Fitness club was closed on 16 March.
Explaining the company processes, 24 Hour Fitness CEO Tony Ueber has posted an open letter, saying the company would suspend collecting membership fees from 16 April, if clubs are not open by then.
"On March 16, we made the difficult decision to close all our clubs, and we announced at that time memberships would be extended to cover the time of club closures," Ueber writes in the letter.
"Based on current public health projections, it appears our clubs may need to be closed for an extended period of time.
"As such, we will suspend all membership billings, including billings for any additional services and fees, effective April 16, if we are unable to reopen clubs by that time in your area.
"For the membership billings that were charged from March 17 through April 15, members will receive additional days of access equal to the number of days paid for while the clubs were closed in your area.
"That extension will apply at the end of the membership. If you have a pre-paid membership, your end date will be extended to cover the amount of time the clubs are closed in your area.
"I realise that some of you may want to cancel, but I personally hope you don’t. For those of you with the desire to cancel you can go to 24hourfitness.com, click on the link and follow the instructions to submit your request to cancel."
A third lawsuit was filed in the Southern District of Florida on 30 March against Fitness International, the parent company of LA Fitness. A member there launched the case after saying they too had been charged full membership fees despite being unable to visit their club.
In response, LA Fitness has issued a statement, explaining its approach to membership fees during the closure.
"When we temporarily closed all of our clubs at the end of the day on March 16 we hoped that this would be a short-lived phenomenon.
"Once we determined that we would need to extend the temporary closure, we made the difficult and unwanted decision to temporarily furlough nearly all of our club employees.
"For our members we have waived “freeze” fees and suspended all billing. Some members were billed for a short period of time during which our clubs were closed.
"To address this, we immediately took the following steps. First, we automatically extended the membership time for all of those affected members. This means, for example, that if a member paid dues to use a club through March 31, then that member will have 15 additional days of membership time (corresponding to the 15 day period from March 17 through March 31) after their membership would have otherwise expired.
"Second, in appreciation for their patience during this confusion, we offered that same group of members the option to (1) take additional free membership time at the end of their membership or (2) receive a complimentary three-month membership to give to a new member which is redeemable over the next 12 months. We began notifying members with details about these options, and explaining how these options may be selected, over this past weekend.
"Finally, we have a team of employees spread out over our clubs, who continue to field questions from members about cancellations, refunds and credit options. We are being flexible in our resolutions to meet the needs of the members.
"We encourage members to first check to see if their questions were resolved in the email we sent with the options explained here. If not, we have Frequently Asked Questions posted on our phone app and website. If they still have questions, they can call or email us but again, we ask for patience as we do our best to assist everyone. The “call back” option is recommended as we are returning messages as soon as we can over the course of the week."
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