In April 1994, Ballys Total Fitness, a chain of exercise gyms, paid $120,000 to settle Federal Trade Commission charges of illegal billing, cancellation, refund, and debt-collection practices. But consumers writing to ConsumerAffairs.com complain that little has changed in eleven years.
In a consistent refrain, consumers from New York to California say they thought they were signing up for a trial period of 14 to 30 days, only to discover the trial had turned into an iron-clad, three year contract.
Keith, of North Richland, Texas, signed up for what he thought was a one-month guest membership for a visiting friend. He says he was told his cost would be $5.00, which he paid on the spot with his debit card. But at the end of the month, he got a bill from Ballys. And the bills kept coming.
I have been charged $55.17 every month, for a membership that I was told would only total $5.00, he told ConsumerAffairs.com.
I called the Ballys customer service number and spoke to an operator about this and she said I was tied to a three-year contract and that I needed to write a letter to the Ballys main office in California about this. I wrote the letter and their response was that I needed to either pay $1,457.33 in full or continue on with my $55.17 a month payments.
Heather, of Martinez, California, tells us she went to the Ballys Web site and enrolled in the two-week free trial membership so she could give the club a try. She said she was told she could cancel anytime during the two-week trial, or anytime within 30 days.
When I realized that my schedule and the gyms times were not going to work I attempted to cancel the membership. That was when I was told that I could not cancel until I had gone to the gym 12 times, or if I moved to a location with no Bally's gym within a 25-mile radius, she told ConsumerAffairs.com
Several consumers who contacted ConsumerAffairs.com mentioned they were specifically told to attend the gym 12 times during their trial period, though some said it was never presented as a requirement.
The terms of that settlement mandate that the defendants (Ballys) more clearly inform both current and future members about their cancellation rights, in part, by replacing current membership contracts with contracts that contain clear explanations about how to exercise the right to cancel, and how refunds will be calculated. The agreement also:
- prohibits the defendants from improperly charging consumers' credit-card accounts or debiting their bank accounts for health-club memberships;
- prohibits them from using harassment or deceptive means to collect membership fees, and from collecting amounts not expressly authorized in contracts with members;
- requires the defendants in the future to acknowledge cancellation requests within 10 days, and to cancel the contracts and mail appropriate fee refunds on properly-cancelled memberships within 20 days after that; and
- requires them to inform credit reporting bureaus in writing about any erroneous delinquent-account information Bally's provided the bureau about any club member or former member who submits a claim form pursuant to the FTC settlement.
At the time of the settlement, Ballys and its two subsidiaries agreed to refund membership or other fees to what the government estimated to be thousands of customers.