FTC sues LA Fitness over 'onerous' cancellation policy

(CN) — The Federal Trade Commission accused California-based gym operator Fitness International in a Wednesday lawsuit of having an opaque cancellation process that’s led customers to pay millions of dollars in unwanted fees.

The FTC called the cancellation options restrictive and difficult to access, and said they were unreasonable and a violation of federal law. They’re also a violation of the Online Shoppers’ Confidence Act, the commission said in its complaint.

It’s asked a federal judge in the Central District of California to stop Fitness International from violating the law and award monetary relief.

“Defendants have received tens of thousands of reports from consumers complaining that their cancellation practices are difficult,” the commission said in the complaint. “Consumers also have filed thousands of reports complaining about defendants’ cancellation practices with consumer groups and state and federal authorities. Nevertheless, for years, defendants have consistently failed to provide a simple cancellation method.”

Fitness International and Fitness & Sports Clubs, a subsidiary of Fitness International, operate under the names LA Fitness, Esporta Fitness, City Sports Club and Club Studio. They have over 600 locations and over 3.7 million members nationwide.

Memberships can cost between $30 and $299 a month, depending on the location and additional services.

The FTC described their cancellation policies as complex and exacting.

Fitness International allows customers to cancel in person and by mail. However, both methods are difficult, the commission said.

In person, someone must first find a cancellation form in their online account and print it. But, the FTC says, “defendants have required consumers to navigate to their website, which consumers rarely if ever use, and complete a cumbersome log in process which requires credentials that many consumers either do not have or do not remember.”

Customers must then reportedly take completed forms to a gym during limited hours and find the operations manager, who processes them. It says no other employee is able to cancel a membership, leading some people to return later in hopes the right employee is available.

Cancellation by mail is possible as well. Customers must complete the same printed form and send it via certified or registered mail. Both methods require a visit to a post office and additional costs.

The cancellation form is not available on the company’s app, which Fitness International encourages people to use. The app lets people find gym locations, check into the gym, and book classes and personal training sessions.

“Defendants further complicate downloading their cancellation form by not making the form publicly available on their website, instead requiring consumers to login in order to download the cancellation form,” the commission said.

Additionally, when people have tried to cancel via phone or email, they’ve reportedly been directed by staff to the company’s cancellation policy and denied those requests.

That’s contrasted with how Fitness International acts when it receives a complaint from the Better Business Bureau or a state attorney general, the FTC claims. In those cases, staff quickly resolves the issue and cancels a membership without the onerous process, the commission said.

“Defendants have continued to impose these complicated and onerous cancellation requirements on consumers nationwide despite adopting different practices in the limited number of states that require specific simpler means of cancellation for gyms, such as cancellation by email or online,” the commission said.

The company is also accused of using aggressive tactics in its billing practices. Some customers who couldn’t cancel through the gym have contacted their bank to stop automatic payments. One person reported that when his first card was declined, the gym billed another card, despite not providing that card number to the gym.

The commission vote to authorize the lawsuit was 3 to zero.

“The FTC’s complaint describes a scenario that too many Americans have experienced — a gym membership that seems impossible to cancel,” said Christopher Mufarrige, director of the Bureau of Consumer Protection, in a statement. “Tens of thousands of LA Fitness customers reported difficulties — cancellation was often restricted to specific times or required speaking to specific managers who were often not present or available.”

Fitness International said in a statement it was disappointed in the commission for filing the suit.

“The allegations are without merit, and the statute the FTC relies upon — the Restore Online Shoppers’ Confidence Act (ROSCA), enacted almost 15 years ago — was designed to address only online retail transactions, does not require any specific method of cancellation, and has never before been applied to the health club industry,” it said. “We remain confident that we will prevail in court.”