The FTC’s lawsuit marks a clear escalation in ongoing federal efforts to force gyms and health clubs to make it easier for consumers to cancel memberships
The Federal Trade Commission (FTC) has sued Fitness International LLC, the parent company of LA Fitness and other brands, for allegedly making gym memberships too difficult to cancel.
In a complaint filed Wednesday in California federal court, the FTC alleged that Fitness International has been using “difficult cancellation procedures” regarding gym memberships and other recurring charges.
Those procedures include allegedly making consumers print out a form and submit it to their gym in person in order to cancel their membership, or making them submit a cancellation form through the mail, the FTC said.
“Each of these cancellation methods is opaque, complicated, and demanding — far from simple,” the agency wrote. “In particular, Defendants have not adequately disclosed how to cancel when consumers are signing up for their memberships and have presented different, often contradictory, cancellation requirements during sign up, in membership agreements, and on the Defendants’ websites.”
The FTC also alleged that some Fitness International members continue to be billed for memberships even after they’ve complied with cancellation procedures.
Fitness International, whose portfolio includes LA Fitness, City Sports Club and Club Studio, issued a statement on Wednesday saying it was “disappointed” in the FTC’s lawsuit, arguing that the agency is relying on a law that hasn’t historically been applied to gym memberships.
“We are disappointed that the FTC has chosen to pursue this complaint,” Fitness International president of club operations Jill Hill wrote. “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. We remain confident that we will prevail in court.
Fitness International also noted that it recently introduced an option that allows its members to cancel their membership online.
“With just a few clicks, members may cancel online,” the operator wrote.
Whatever the merits of the case, the FTC’s lawsuit marks a clear escalation in ongoing federal efforts to force gyms and other subscription-based businesses to make it easier for consumers to cancel memberships.
Last year, the agency announced the controversial “click-to-cancel rule,” which would require that businesses, including gyms, make it as easy for consumers to cancel subscriptions and memberships as it was to sign up for them in the first place.
A federal appeals court voided the click-to-cancel rule last month on procedural grounds just before it was set to take effect, but America’s gyms and health clubs are on high alert. Some states have taken matters into their own hands.
In May, New York Attorney General Letitia James announced a $600,000 settlement with Equinox Group, which operates Equinox, Equinox+ and SoulCycle, over alleged unfair membership cancellation practices.
“New Yorkers should be able to cancel a membership they no longer use or want without breaking a sweat,” Attorney General James said in a statement following the settlement.
