New Jersey Division of Consumer Affairs Cites Health Clubs For Failure to Provide Refunds for Canceled Memberships, Other Violations
NEWARK – The New Jersey Division of Consumer Affairs has cited two health clubs for failing to provide refunds to consumers who canceled their memberships within a three-day grace period, as mandated by law.
In addition, the Division cited several health clubs for failing to register with the State, as required by law. These actions continue the Division’s crackdown on health clubs that allegedly violated New Jersey’s consumer protection laws.
“New Jersey law affords consumers a three-day period to change their minds after signing up for a gym membership,” Acting Attorney General John J. Hoffman said. “This law is unambiguous, and health clubs that take advantage of consumers and fail to honor it will be held accountable.”
The Division of Consumer Affairs, working with the Division of Law, issued Notices of Violation and assessed a total of $31,000 in civil penalties against five health clubs, two of which allegedly failed to provide required refunds and all five of which allegedly operated while unregistered.
“The Division is continuing its focus on health clubs in order to protect New Jersey consumers, and to ensure fairness of competition for the many health clubs that comply with our laws,” Division of Consumer Affairs Acting Director Steve Lee said.
Under State law, health clubs must provide a full refund within 30 days to any consumer who cancels his or her membership within three business days of entering into a contract. In addition, health clubs must register with the Division of Consumer Affairs and provide information about their ownership and operations.
The two health clubs cited for failure to provide refunds are:
Bally Total Fitness of Greater New York, Inc., d/b/a “Bally Total Fitness” at 918 Bergen Avenue, Jersey City. The Division has assessed a civil penalty of $10,500 against this company due to its alleged failure to provide a refund, as well as other violations. A Division investigator, acting as a consumer, paid for a one-month contract in early June. Two days later, the investigator canceled the contract by returning to the facility and speaking with a representative, and by completing and submitting the company’s cancellation form. To date, a refund has not been received.
The penalty assessed against Bally Total Fitness of Greater New York also reflects the fact that this business allegedly is operating as an unregistered health club, in violation of New Jersey law.
In addition, Bally Total Fitness of Greater New York is the subject of a 2010 Assurance of Voluntary Compliance in which it agreed to pay $35,000 to the Division of Consumer Affairs and agreed to apply with all applicable laws in the future.
H.R.C. Management Inc., d/b/a “Hillsborough Racquet & Fitness” at 345 Amwell Road, Hillsborough. The Division has assessed a civil penalty of $5,500 due to its failure to provide a refund, as well as other violations. A Division investigator, acting as a consumer, paid for a three-month membership in early June. Two days later, the investigator canceled the contract by returning to the facility and speaking with a representative, and by completing a cancellation notice. To date, a refund has not been received.
The penalty assessed against H.R.C. Management Inc. also reflects the fact that this business allegedly was operating as an unregistered health club, in violation of New Jersey law. However, H.R.C. Management has now paid this penalty in full, and has applied to the Division for registration.
In addition to the above businesses, the Division of Consumer Affairs cited the following three health clubs for their alleged failure to register with the Division:
Results Matter Forever, LLC, d/b/a “Anytime Fitness” at 549 Route 130, Suite 429, Hamilton.
Dalee Dalee, LLC, d/b/a “KOR Fitness” at 1590-C Union Valley Road, West Milford.
Lawrenceville Gym, LLC, d/b/a “New Jersey Athletic Club” at 4152 Quakerbridge Road, Lawrenceville.
The Division of Consumer Affairs has filed administrative Notices of Violation against each of the five businesses. In response, each business may acknowledge the conduct, agree to comply with the law, and pay the assessed civil penalty; or request a mitigation conference at which the Division would consider mitigating circumstances before rendering a final decision; or contest the charges and request a formal administrative hearing before the Director of the Division of Consumer Affairs. If an administrative hearing is held and the Division finds the violations have been proven, additional civil penalties of up to $10,000 for a first violation and up to $20,000 for subsequent violations may be assessed.
The action announced today follows the Division’s crackdown, announced on April 10, 2014, against 54 health clubs, and the assessment of $283,500 in civil penalties, due to the clubs’ alleged failure to register with the State and/or to maintain security bonds intended to protect consumers who pre-pay for long-term memberships.
Advice for Consumers:
Before signing a health club contract or paying a deposit, consumers are urged to:
- Ask a friend or relative to recommend a good health club, then visit the club during the time of day when you would expect to use its facilities. Check to see whether you are satisfied with the equipment’s working order and cleanliness. If possible, talk with health club members to learn their impressions of the facilities.
- Ask for the health club’s State registration number. Then visit the Division of Consumer Affairs’ website at www.NJConsumerAffairs.gov to verify that the club is actively registered.
- If you decide to sign up for a membership for a period longer than three months, call the Division of Consumer Affairs at 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200 to learn whether the health club has posted the security bond as required by law. This security bond assures that a health club would be able to provide refunds to consumers, should the company cease business or violate their contracts.
- Be sure to demand a written contract that clearly indicates the full amount you must pay. State law requires that all health club contracts must be in writing. The contract must conspicuously set forth, on the contract’s first page, the buyer’s total payment obligation.
- Make sure to read it thoroughly and carefully, before you sign. Be sure you are fully aware of the services you will receive, and that you understand all contract terms. After signing a contract, you are entitled under State law to obtain a copy for your own records.
- Know your rights about cancellation. Under State law, the buyer may cancel a health club contract at any time within three operating days after receiving the contract. The buyer’s cancellation must be made in writing, by mail or personal delivery. After cancellation, the buyer is entitled to a full refund within 30 days.
Additional advice can be found in the Division’s Consumer Brief on Health Clubs (also available in Spanish).
Supervising Investigator Murat Botas and Investigators Oscar Mejia, Loretta Creggett, Michael Meola and Roger Hines, of the Division of Consumer Affairs Office of Consumer Protection, conducted these investigations.
Deputy Attorney General Jeffrey Koziar, of the Division of Law, represents the State in these matters.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200.
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