A chain of tanning salons that ran afoul of Colorado consumer authorities has agreed to change its ways, pay fines and restitution and settle a lawsuit brought by the state.
Colorado Attorney General John Suthers brought the suit against Oklahoma-based At The Beach after a number of consumers complained they were misled by sales personnel working for the company. The agreement requires At The Beach to pay an estimated $350,000 in consumer restitution, fines and attorney fees and requires that At The Beach halt its deceptive sales practices and record all of its future sales.
"This agreement is a victory for the hundred of Colorado consumers who felt that At The Beach was not engaging in fair sales practices," Suthers said. "We believe the company's agreement to record all sales transactions will deter future misconduct, and is evidence of the company's desire to change its sales practices."
Cost of cancellation withheld
In practices similar to those cited in complaints about some health clubs, At The Beach allowed its employees to misrepresent that consumers could "cancel their contract at any time," according to the state's complaint.
For the investigate, state officials interviewed both former employees and customers of At The Beach. They say they were told that the company failed to disclose that cancellation would require payment of half of the remaining cost of the contract. Consumers also said they first learned of the cancellation fee when they attempted to cancel.
Consumers will be eligible for restitution if they have already filed a written complaint with the Colorado Attorney General's office or the Better Business Bureau. The Office of the Attorney General estimates that more than $100,000 will be refunded to more than 300 past At The Beach customers.
The company also will be required to pay an additional $75,000 to the state to be used to reimburse consumers who file complaints going forward.
The settlement also requires At The Beach to pay a $75,000 fine and $38,500 to cover the costs of the investigation. At The Beach has already reimbursed Colorado consumers approximately $45,000 as a result of the state's investigation into At The Beach's credit and collection practices.
The settlement also will require At The Beach to:
- Install recording equipment in all of its stores and maintain an audio copy of every sale;
- Update its contracts to require initialing from consumers throughout the document; and,
- Simplify the documentation required to cancel a contract when moving outside the company's service areas.