Attorney General Hardy Myers today announced a health club sweep that found four Oregon fitness clubs failing to include a number of mandatory cancellation and refund provisions in their membership contracts. Named in four court actions are Bucklet Holding Company, LLC doing business as Apollo Fitness Center, Capitol Racquet Sports, Inc. doing business as Courthouse Athletic Club of Salem, Fitness Experience, Inc. doing business as Gold's Gym of Salem/Albany, and Nautilus Plus of Oregon, Inc. doing business as Gold's Gym of Beaverton and now Bally Total Fitness.
"Tens of thousands of Oregonians have joined health clubs without being informed of their rights under the law," Myers said. "Consumers must be told of their obligations and refund rights under any health spa contract before agreeing to thousands of dollars in payments."
Department of Justice investigators first looked at the health spa industry last year after receiving complaints against some of the 24 Hour Fitness clubs that refused to give prospective members copies of membership contracts as required by Oregon law.
"Consumers have the right to request and take home a copy of any health club's membership contract in order to review the terms carefully before deciding whether to join the club," Myers said.
Investigators found that 24 Hour Fitness was not complying with the Oregon health spa laws although it had promised compliance to the Courts in two separate settlement agreements filed in Marion County Court in December 1998 and in September 1999. Attorney General Myers filed a contempt lawsuit against 24 Hour Fitness in February 2000. The Courts approved a judgment in August 2000 finding 24 Hour Fitness in contempt of court.
Contract problems with 24 Hour Fitness triggered investigations of the other four fitness facilities with investigators finding non-compliance in their written contract disclosures. Apollo Fitness Club, Courthouse Athletic Club, Gold's Gym of Salem/Albany and Nautilus Plus of Oregon doing business as Gold's Gym all failed to include a number of mandatory cancellation and refund provisions in their membership contracts.
Under the agreements, the four companies agree to revise their membership contracts to conform to Oregon law and to each pay $3,000 to the Consumer Protection and Education Fund. The companies also agree to send amended membership agreements to all current members.
Oregon's Health Spa law requires the following provisions to be included in health club membership contracts:
Consumers may cancel their health spa contracts for any reason and receive full refunds if they write the business by midnight of the third business day after signing the contract.
At anytime during the contract term, a consumer may cancel:
1) If the buyer dies or becomes physically unable to use a substantial portion of those health spa services used by the buyer from the date of the contract until the time of disability;
2) If the health spa goes out of business;
3) If the health spa moves its facility closest to the residence of the buyer on the date of the contract to a location more than five additional miles from that residence;
4) If a facility, construction or improvement is not completed by the date represented in the contract;
5) If the health spa materially changes the health spa services promised as part of the initial contract;
When consumers cancel for any of the five reasons listed in the contract, the health club must provide a refund based on the calculation of dividing the contract price by the number of weeks in the contract term and multiplying the result by the number of weeks remaining in the contract term.
Consumers are reminded that the Oregon Health Spa law applies to tanning salons and any business whose intended purpose is to assist consumers with physical exercise, weight control or figure development.
Additional consumer information is available by calling the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392 or online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org