Massachusetts Office of Consumer Affairs Finds Many Local Fitness Clubs Not Complying With Disclosure Laws
Calls for Clean Up of Health Club Business Practices
BOSTON – After a month-long investigation of health clubs around the Boston-area, the state Office of Consumer Affairs and Business Regulation today announced that it had found violations of state disclosure laws at many local fitness clubs. Specifically, investigators found that all of the clubs surveyed failed to display membership prices and fees as mandated by state law.
The survey was conducted from December through January, the time when many health clubs are offering special deals. Investigators used information from company websites, phone inquiries, and in-person visits. Investigators visited 15 fitness clubs in the greater Boston area to check for price signage, ask about rates and fees, and look at cancellation policies. Follow-up calls were made to obtain additional information not given during the visit.
“This is the busiest season for new health club memberships, with people trying to stick to their New Year’s resolutions,” said Undersecretary Barbara Anthony. “We want to make sure that, as with any other product or service you buy, consumers are aware of their rights and told the price and terms and conditions before signing any contracts. Our survey shows that health club consumers, through no fault of their own, may not know how much they’ll be paying.”
The survey found that in addition to failing to post membership prices, none of the locations surveyed adequately displayed a consumer’s 3-day right to cancel health club contracts. In many instances when investigators asked for this information, they were provided with an incomplete list of prices on a sheet of paper, or were only told the information verbally.
In addition to posting the right to cancel on the premises of the health club, notice of these rights must be included in the contract. Investigators were able to obtain only two of the 15 contracts, because customer service representatives would not provide a contract unless the investigator agreed in advance to sign-up with customer service representatives. It appears that many club representatives were employing high-pressure sales tactics to obtain memberships on the spot. It also appears that not all clubs included the required cancellation notice in their contracts. Under Massachusetts state law, any health club contract that does not comply with the state’s requirements for health club contracts is void and unenforceable.
The survey also found that in addition to monthly or annual dues, additional fees were charged at some of the clubs such as:
- Enrollment fees ranging from $25 to $149. These fees are charged at the start of membership and are usually a one-time only fee in addition to annual monthly membership fees.
- Rate Lock Guarantee fees ranging from $39 to $49.99. Some clubs advertise this annual fee as an option to allow consumers to lock into their original membership rate.
- Annual fees ranging from $39.99 to $50. An annual fee is charged in addition to pre-existing membership fees once annually.
- Termination fees ranging from $59 - $199. These fees are charged to cancel the contract and are applied under various conditions.
“Signing a contract for a health club should not resemble the old stereotype of purchasing a used car,” said Undersecretary Anthony. “The law requires complete up front disclosure of all prices and material terms and conditions. We found some troubling transgressions during the course of our investigation and will refer all alleged violations to the Attorney General’s Office.”
Under Massachusetts law, a health club must clearly post all of its courses and prices, discounts, sales and offers. The club must also post a consumer’s three-day right to cancel the premises of the health club.
Massachusetts consumers have a three day right to cancel a health club contract. To cancel, a consumer must deliver written notice of the cancellation, in person or postmarked by certified or registered United States mail, within three business days of the contract date. All money must be refunded within 15 days of the club's receipt of the cancellation notice. However, the club has the right to retain a portion of the total contract price for services or facilities used prior to cancellation.
A consumer may cancel a health club contract for a refund outside of the three-day grace period only for the following reasons:
- You move your residence or your place of employment more than 25 miles from any health club operated by the seller, or a similar club that will accept your membership;
- Upon a doctor's order, you cannot physically or medically receive the services because of significant physical or medical disability for a period in excess of three months;
- In case of your death; or
- The health club services promised are not available due to:
- failure to open a planned health club or location;
- closing of a health club or location;
- or, substantial change in the operation of a health club or location.
The club has the right to retain a portion of the total contract price for services or facilities used prior to cancellation. Cancellations outside the grace period for other reasons are not entitled to refunds and may be subject to additional cancellation fees. According to the survey, cancellation fees were as high as $200, while others charged a percentage of the membership. Some locations did not charge any cancellation fees, and many locations did not charge cancellation fees for month-to-month memberships. Clubs are not permitted to charge cancellation fees for cancellations made in accordance with the reasons above.
Before signing a health club contract, be sure to check the club’s reputation with the Better Business Bureau and Attorney General’s Office, and make sure to visit the location. While touring the gym, consumers should:
- Look for signs that give information about the 3-day right to cancel;
- Look for signs that post the clubs’ prices;
- Ask club members about the club;
- Inspect the club for cleanliness and the condition of the equipment;
- Visit during the times you would normally use the facility to determine if it is crowded during that time;
- Ask if the club has CPR equipment, defibrillators and staff trained to use the equipment;
- Inquire about the training qualifications of the staff;
- Determine what services are included with a membership and what costs extra;
- Read the contract carefully before signing and make sure you know all terms of the agreement.
The Office of Consumer Affairs has more tips and information about choosing a health club available on its website .
The Office of Consumer Affairs and Business Regulation is committed to protecting consumers through consumer advocacy and education, and also works to ensure that the businesses its agencies regulate treat all Massachusetts consumers fairly. Follow the Office on its blog, on Facebook and Twitter, @Mass_Consumer.