“Consumers who pay for health club memberships deserve the assurance that they’re signing contracts with clubs that are properly registered and operating in accordance with the law,” said Acting Attorney General Robert Lougy. “The clubs we cited have allegedly failed to comply with the laws designed to protect consumers. We’re sending a message to them that we won’t tolerate such non-compliance.”
The Division of Consumer Affairs, working with the Division of Law, issued Notices of Violation to all 20 clubs for failing to register their businesses. State law requires that all health clubs which devote at least 40 percent of their floor space to physical fitness services must register with the Division of Consumer Affairs and provide information about their ownership and operations.
In addition to the registration violations, nine of the 20 clubs allegedly violated consumer laws by selling longer‐term contracts to consumers without maintaining a required bond, letter of credit or other form of security acceptable to the Division of Consumer Affairs, as required by state law. This requirement assures a source for refunds to consumers, should the health club cease business or violate their contracts.
Along with these violations, 14 of the 20 clubs were cited for allegedly failing to conspicuously post a notification of consumers’ rights, as required by law.
“When it comes to joining a health club, consumers shouldn’t have to worry that getting healthy will hurt them financially,” said Steve Lee, Acting Director of the New Jersey Division of Consumer Affairs. “They have a right to expect their club is properly registered and properly bonded so they won’t lose money on a long-term contract should the club go out of business or violate contracts with the consumer.”
The Notices of Violation arose out of the Division’s site visits at 23 health clubs statewide to observe their facilities and business operations, obtain copies of contracts and other documents, and compare that information with the state’s registration records.
A $5,000 penalty is being assessed for registration violations. An additional $5,000 penalty is being assessed against Bolero Spa in Wildwood and World Gym in Dunellen because both clubs had previous registration violations. The nine clubs that allegedly offered contracts longer than three months without posting a required bond, line of credit or other form of acceptable security, have each been assessed an additional $5,000 penalty. The 14 clubs that failed to conspicuously post the consumer rights notice have each been assessed an additional $250 penalty.
In response to the Notices of Violation, 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.
Advice for Consumers:
Before signing a health club contract or paying a deposit, consumers are urged to:
Investigators Murat Botas, Oscar Mejia, Roger Hines, Jessica Lugo and Mitchell Bomrind conducted this investigation.
Deputy Attorneys General Jeffrey Koziar and Mark Critchley from the Consumer Fraud Prosecution Section within the Division of Law represented the State in these actions.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online 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.