If they receive complaints, state consumer protection departments may launch their own investigations into problematic club practices.
In 2016, for instance, after having examined the operations of 96 clubs in New York state, the NY Attorney General assessed $38,000 in fines for violations of the state’s Health Club Services Law. Later that year, the New Jersey Division of Consumer Affairs levied a total of $158,000 in fines against 20 fitness facilities for various legal infractions. Two years earlier, it had issued $314,000 in fines.
You can minimize the risks of consumer litigation and state enforcement by taking the following simple steps:
Pay Attention to the Small Print
A 10-point type font, bold lettering, and capital letters—what do these have in common?
Most states have laws on the books that specifically regulate the selling, and the cancellation, of club memberships and services. Many of these laws require that membership agreements provide the consumer with clear instructions about how to cancel the contract. Typically, these directions must be followed verbatim, as per the text required by the law—i.e., not shortened, paraphrased, or summarized.
The law also may stipulate certain formatting requirements for the explanation of the consumer’s cancellation rights—things such as the use of a 10-point font, bold lettering, and capital letters.
In addition to reviewing the section on the member’s right to cancellation, be sure to carefully study your state’s law on club contracts, because other text might be mandated. For example, membership agreements in New Jersey must state that the club has filed a bond or security with the state’s consumer affairs division. These bonding and notification requirements are designed to protect consumers from financial losses if a club closes unexpectedly.
In its 2016 action, New Jersey found that the clubs it penalized had “failed to register, failed to maintain bond, and failed to post information on violations.”
Among the facilities cited were those of four major fitness franchises.
In Texas, membership agreements must include the club’s state registration number. In California, contracts must describe the club’s services, facilities, and hours of operation, or direct consumers to a website that provides that information; they also must contain a warning about the health risks of steroid use.