Bally Total Fitness Corp. has signed an agreed judgment with the Texas Attorney General's Office that prohibits the California-based company from continuing to send its former members misleading "past-due" mailings.
Under the agreement, Bally must provide refunds to Texas consumers who were deceived into paying fees they did not actually owe and who did not use its fitness facilities.
Bally operates 24 fitness centers in and around the Dallas, Houston and San Antonio areas. An investigation by Attorney General Greg Abbott's office revealed that between summer 2009 and March 2010, Bally mailed more than 11,000 misleading "past due" collection notices to former customers in an attempt to encourage them to rejoin their former gym.
Notices of arrears
The notices, which created the false impression that former members owed Bally outstanding membership fees, were actually an attempt to get former members to renew their memberships.
The judgment also includes an injunction that prohibits Bally from indicating that current or former members owe a balance unless the balance is actually owed. Bally also is banned from claiming harmful information may be submitted to a credit bureau when Bally's records do not support such a representation.
According to records obtained by the state, more than 1,000 Texas consumers made payments to Bally after receiving the improper past-due collection notices. Under the agreement, Bally will send out settlement notices to customers who are automatically eligible for restitution. Any customers who do not receive a notice but believe they are entitled to restitution should file a complaint with the AG's office.
The improper collection notices that led to the enforcement action indicated that recipients owed "past-due" fees under Bally's "Value Plan" -- fees for which the notice demanded immediate payment. Some of Bally's past due notices even claimed that failure to remit a payment could result in a negative entry on the former members' credit reports.
Texas's enforcement action charged Bally with attempting to confuse its former Value Plan members with deceptive bills so they would make payments that were not actually owed and which effectively reinstated a lapsed membership they did not want.
Under their skin
It isn't just Bally's collection notice practices that have consumers ticked off.
"I signed a one year contract with Bally's and used my Visa to pay the entire year in one payment -- I specifically did not want to be charged a monthly fee," Alba of Bothell, WA, tells ConsumerAffairs.com. "Six months after the one year was up, my husband noticed Bally's charge on the Visa -- a review of Visa charges showed monthly charges past the one year contract. When I complained to the corporate office they said that they could not give me a refund because 'that's just the way the paperwork came to us'. No where on my paperwork does it say that I agreed to pay monthly payments!"
Stavros of Schererville, IN, says he cancelled his membership by sending a registered letter and the signed cancellation notice to Bally. "I continue to receive monthly bills. When I tried to call to complain, the recording said that there is a high volume of calls and they could not answer my call. This has been a big harassment from Bally's."
Texas consumers who believe they have been deceived by similar fraudulent business practices may call the Office of the Attorney General's toll-free complaint line at (800) 252-8011 or file a complaint online.
