The Federal Trade Commission is suing gym chain LA Fitness for making it “exceedingly difficult” to cancel memberships to its clubs, calling its practices “unfair conduct.”
The complaint, filed in the U.S. District Court for the Central District of California on Wednesday, Aug. 20, accuses parent company Fitness International and its subsidiary Fitness & Sports Clubs of using “opaque and complicated” methods to make it “extremely difficult” for customers to cancel memberships.
“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.
Cancelling memberships is ‘extremely difficult,’ says FTC
The process of cancelling an LA Fitness membership is cumbersome, alleges the FTC complaint, as it requires customers to appear in person or send a notice via mail. Customers are directed to their LA Fitness accounts to print a cancellation form, according to the complaint, an act that can be complicated in and of itself because it entails remembering the credentials. For a password reset, consumers must provide the email address used to sign up, the key tag numbers assigned at sign-up and the first five digits of the credit card or bank account used to open the account.
When people appear in person to cancel their memberships, the suit alleges that LA Fitness complicates the process by enacting a policy that states only one employee is allowed to process cancellations. If that employee is not available, they can not cancel, despite multiple employees being authorized to sign people up for memberships. These employees typically work the same hours as the average American during the day, making it difficult for customers to arrive at the gym when the necessary employee is present, the complaint says.
“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,” said Mufarrige.
Cancelling by mail is also made difficult, alleges the FTC, as consumers are not informed that they can submit a simple written notice of their cancellation but are instead told to use the cancellation form. Even when they do submit the form, they are not told which information is required to process the cancellation and are expected to pay out of pocket to send it via certified or registered mail, the complaint says.
“Instead of simplifying the cancellation process in response to consumer complaints, LA Fitness has trained staff to reject escalated requests and to deny cancellations requested by phone or email, reiterating that all cancellations must be done in person with one specific employee or by mail,” the FTC said in an Aug. 20 press release. “Consumers who try to cancel their memberships by stopping charges to their bank or credit card find they are rebilled, often under new account numbers.”
LA Fitness violated FTC Act, alleges suit
These practices constitute violations of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), according to the release.
Fitness International, which also owns and operates Esporta Fitness, City Sports Club and Club Studio, has since added a website cancellation option after the FTC sent a civil investigation demand. Despite this, the FTC alleges that the new option imposes an unnecessary burden. The online option allows cancellation for subscriptions with “stand-alone agreements,” while any information about cancelling a membership is “buried” on the webpage and is only accessible after multiple “cumbersome methods,” says the complaint. Consumers are also unable to cancel via the gym’s app.
The FTC is seeking a court order to prohibit the allegedly unfair conduct and for consumers harmed by the difficulty in cancelling memberships to receive money back.
Fitness International issued a response on Aug. 20, saying it was disappointed that the FTC chose to pursue the case.
“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,” the company said.
Fitness International also said it implemented its online cancellation voluntarily to allow customers to end memberships with “just a few clicks” and chose to keep it in place despite regulations not requiring as much.
“Our company works diligently to comply with all health club state laws regarding membership cancellations and to offer at a minimum every cancellation method specifically required by each state,” it said.
A law called the “click to cancel rule” was adopted by the FTC during the Biden administration to require that gyms make it easier for customers to cancel memberships. However, a federal appeals court blocked the rule in July shortly before it was set to go into effect.
This article originally appeared on USA TODAY: FTC sues LA fitness for ‘extremely difficult’ cancellation policy
