Town Sports International, Jupiter, Florida, is facing a second class action suit and responded to letters from four state attorney general offices related to its membership billing and cancellation policies during the coronavirus pandemic.
Town Sports, which operates clubs under the brand names New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Club, Washington Sports Club, TMPLE and Total Woman Gym + Spa, already faces a class action suit from a member of its New York Sports Club, alleging that she is being unjustly charged membership dues and denied the ability to cancel her membership during the COVID-19 pandemic-forced club closures. That complaint, which was filed in the U.S. District Court for the Southern District of New York on March 26, also alleges that her electronic signature had been superimposed onto other terms and agreement forms that she had not seen.
The second separate lawsuit was filed on April 6 in the U.S. District Court for Massachusetts by members of Boston Sports Clubs. This complaint alleges that Town Sports temporarily closed its facilities on March 16 due to the COVID-19 pandemic, furloughed most of its employees and then “shockingly and willingly continued to charge consumers monthly membership fees for services that it knowingly would not render.”
Massachusetts Attorney General Maura Healey, who was not part of this suit, noted that she had received 920 complaints from Boston Sports Club members alleging that they had tried and failed to cancel their contracts with the company despite making phone calls, emailing and sending social media messages to the company in an effort to cancel their contracts. Consumers alleged their requests received no responses, she said in a media release. Consumers also alleged the company continued to charge them for memberships despite the clubs being closed.
On April 3, Healey sent a letter to Town Sports Chairman and CEO Patrick Walsh asking that the company stop billing members while its Boston Sports Clubs are closed and that it allow members to cancel their contracts without paying a fee.
On April 10, the Massachusetts attorney general shared that she had received a commitment from Town Sports to comply with her office’s requests. Town Sports stated that it would cease all billing until its clubs re-open by placing a no-cost freeze on all member accounts, provide additional membership access equal to the number of days paid while the clubs are closed, allow members to cancel by sending a request through their club’s website, and waive all cancelation fees through April 30, 2020, according to Healey. Town Sports is offering online streaming workouts for members who wish to remain active and has offered to provide upgrades for Boston Sports Club members once their clubs reopen.
“We’ll be watching closely to make sure the company does right by its clients going forward,” Healey said in the media release.
Under Massachusetts law, consumers have a right to cancel a contract with a health club when the club “substantially changes the operation of the health club or location,” according to the attorney general. The indefinite closure of all Boston Sports Clubs as a result of the COVID-19 epidemic qualifies as a “substantial change” and gives members the right to cancel their contracts.
Three other state attorneys general banned together and sent a letter on April 3 to Town Sports demanding similar actions. Attorneys general from New York, Pennsylvania and the District of Columbia asked Town Sports to stop charging members while their clubs were closed and to stop charging fees to customers seeking cancellations and membership freezes, according to a media release from the DC attorney general’s office.
Since that letter was sent, Town Sports has said it would automatically freeze all memberships, but the DC Office of the Attorney General said that it is still working with Town Sports to address some remaining issues.
The DC Office of the Attorney General is engaged in active litigation with Town Sports over allegations that the company violated both consumer protection laws and the terms of a 2016 settlement agreement regarding misleading cancellation policies.
Town Sports isn’t the only club company that received letters from an attorney general’s office. The Arizona Attorney General Office sent letters to Life Time, Planet Fitness and Mountainside Fitness demanding that these companies allow members of its clubs in Arizona to cancel their memberships online rather than requiring that they do so in-person, as was stated on their websites.
Since those letters were sent, Life Time and Planet Fitness confirmed to Club Industry that they were allowing members to cancel remotely. Life Time said that it has accepted notice of cancellations by email and U.S. mail for several years.
A statement from Life Time noted: “The standard cancellation notice still applies; however, no membership dues will be assessed until the clubs reopen. Members also have the option of putting their memberships on hold during this time period. Additionally, we are not charging our members access dues during the period that our clubs are closed, and we prorated March dues based on our March 17 closure.”
Planet Fitness shared that it is processing cancellation requests while closed and has proactively frozen all memberships on behalf of members so they are not being billed any fees during this time.
Mountainside Fitness declined to comment.