Texas Attorney General Greg Abbott has accused Bally Total Fitness Corp. with misleading former customers into paying past due membership fees they didn't owe.
According to the Abbott's investigation, between summer 2009 and March 2010, Bally mailed more than 11,000 misleading past due notices to former members, creating a false impression that they owed the fitness center money. The notices were actually an attempt by Bally to encourage the former customers to rejoin the gym.
The investigation found that more than 1,000 Texans made payments to Bally after receiving the past due notices. However, when former members contacted company representatives, they were told that the notices were not part of a collection effort but an attempt to get the members to renew their memberships. In all, about 11,000 people received notices, Abbott spokesman Tom Kelley told Consumer Ally.
"You're making a claim to a former member misleading that consumer and making that person pay an amount he or she doesn't owe," said Kelley. "It's clearly a deception."
Kelley said former members were essentially given a sales pitch when they called to inquire about the notices they received. He added that he had not seen this type of tactic used by a company before.
The notices sent by Bally claimed that recipients owed at least one month's overdue fees and that they had to pay those fees immediately to avoid future start-up fees. Some notices also warned former members that not paying their dues could hurt their credit report.
Pete Marino, a spokesperson for Bally, issued the following statement to Consumer Ally.
"While we review the terms of the lawsuit, we are working with the attorney general's office to reach a swift and amicable resolution," Marino said. "Bally prides itself on being a consumer-centric organization and we continue to implement new procedures that will ehance communications with our members."
The AG's office is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act and restitution for former customers who mistakenly paid.
Bally is based in California and operates 24 fitness centers in and around the Dallas, Houston and San Antonio areas.
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