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New Jersey Sues Five Health Club Operators

June 7, 2006
Five independent health club operators in New Jersey are charged with violating a number of consumer laws, including failure to notify customers of their right to cancel contracts and obtain refunds.

"Businesses that operate in New Jersey must adhere to state law or face the consequences of their action - or inaction," said state Attorney General Zulima Farber. "We've filed suit because we want all required consumer protections to be in place."

The health clubs, operated under the Royal Fitness, Pure Focus Sports Club, Planet Gym, Champion Fitness Center, and Achieve Fitness names, are alleged to have committed multiple violations of New Jersey's Consumer Fraud Act, the Health Club Services Provisions of the Consumer Fraud Act, the Health Club Services Regulations and the General Advertising Regulations.

Among other things, the state alleges that the health clubs failed to post the necessary bond and failed to include provisions in health club services contracts that notified consumers of their rights.

The state filed five separate complaints in State Superior Court in Essex County. "Health clubs are supposed to be places for New Jerseyans to get work outs, not places for them to get worked over," state Consumer Affairs Director Kimberly Ricketts said.

"These suits should put clubs across the state on notice that they must do the right thing by consumers and abide by the law."

The complaints allege that the health clubs offered memberships in excess of three months but failed to maintain a bond, letter or credit or other security for the deposits collected from members, as required by the Health Club Services Provisions of the Consumer Fraud Act (CFA).

The complaints also allege that by offering memberships longer than three months when not authorized to do so, the defendants violated the CFA and the General Advertising Regulations by engaging in unconscionable commercial practices and making false promises or misrepresentations.

Several complaints further allege that membership contracts failed to contain specific disclosures as to cancellation, refund and total payment obligation.

Each complaint seeks restitution for any affected consumer and seeks the maximum statutory civil penalties for each violation of the CFA, which is up to $10,000 for the first violation and up to $20,000 for each subsequent violation.

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