The California-based fitness chain, which operates 24 fitness centers in and around the Dallas, Houston and San Antonio areas, and almost 300 more around the country, signed an agreed judgment with the Texas Attorney General's Office prohibiting the past-due mailings intended to convince past customers to rejoin its gyms. Bally must also refund Texans it fooled into paying fees they didn't owe for gym time they didn't use.
An investigation by the Attorney General's Office revealed that between summer 2009 and spring 2010, Bally mailed more than 11,000 of the notices. The bogus billings created the impression that former members owed Bally outstanding membership fees, but were actually an attempt to con them into renewing memberships, the state said.
The notices indicated recipients owed fees under Bally's "Value Plan," for which the notice demanded immediate payment. Some notices claimed that failure to pay could result in a negative entry on credit reports. The bills, once paid, reinstated a lapsed or unwanted membership.
The judgment also prohibits Bally from indicating that current or former members owe a balance, unless any balance is actually owed. Bally is also forbidden from claiming harmful information may be submitted to a credit bureau if its records don't prove any payment deliquency.
More than 1,000 Texans made payments after receiving the mailing. Under the agreement, Bally will mail settlement notices to customers who are automatically eligible for refunds.
Any customers who do not receive a notice but believe they are entitled to compensation should file a complaint with the attorney general's office. Texans 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 online at www.texasattorneygeneral.gov
A consumer alert from the Michigan Attorney General's office earlier this year noted hundreds of complaints from consumers about fitness centers. The majority involved discrepancies between what consumers say they were told by sales personnel and what the signed contract actually guaranteed. The Michigan office offered the following tips:
- Find out if complaints have been filed against the health club you are considering.
- Make sure you understand cancellation and refund policies before signing a contract.
- Determine what services are included with your membership and if add-ons such as tanning or aerobics cost more.
- Read any contract carefully before signing. Don't allow yourself to be rushed prior to signing any contract -- take your time and make sure you understand all the terms before signing.
- After you sign your contract, make sure you keep a copy. Some companies may ask you to pay additional fees on top of what you have already paid or agreed to pay. If you are asked to pay additional fees, make sure that is allowed under your contract.
- You may be asked to pay fees that are not mandatory for you to keep your membership in good standing. This should be made clear to you by the company -- if it is not clear, call the company and ask.