Press Release  AG Campbell Secures Judgement For Nearly $4 Million In Restitution For Former Customers Of Boston Sports Club

BOSTON — Massachusetts Attorney General Andrea Joy Campbell today announced that the Suffolk County Superior Court found in her office’s favor on all counts in her office’s lawsuit against Patrick Walsh, the former CEO of Town Sports International LLC d/b/a Boston Sports Club (“BSC”). As part of its judgement, the Court ordered Walsh to pay $3,850,048 in restitution to the Commonwealth, which will be returned to impacted customers once it is paid. Town Sports International was a defendant but previously filed for bankruptcy and was therefore left out of the Court’s judgement.  

The Court found that Walsh unfairly charged members in April 2020 for services he knew would not be provided, made deceptive statements to BSC members, and violated the Health Club Act by thwarting BSC members’ ability to cancel their memberships and failing to honor cancellation requests. 

“After years of litigation and a multiweek trial, I am incredibly proud of my team who fought tirelessly to secure meaningful relief for Massachusetts consumers who were unfairly charged for services they could not use during the global pandemic,” said AG Campbell. “This victory sends a clear message that my office will continue to prioritize consumers and enforcement of our strong consumer protection laws.” 

During the COVID-19 pandemic, all BSC locations were closed from mid-March 2020 through July 2020. Despite being closed, Walsh decided to bill members for April 2020. The Court found that Walsh’s decision to bill members for time that the gym was closed was unfair because Walsh knowingly charged members for gym services he knew that BSC would not provide.  

Leading up to the April billing and under Walsh’s approval, BSC sent out several letters to members claiming that they would receive credits to their accounts once the clubs reopened and omitting any mention of the upcoming April billing. When the clubs reopened in July 2020, members did not receive any credits unless they personally complained. In light of these facts, the Court found that these letters were deceptive. 

Surrounding the April billing, the Attorney General’s Office (AGO) received more than 2,000 complaints from members who tried and failed to cancel their contracts with the company to avoid paying for facilities they could not access. Consumers reported and testified at trial that they called, emailed, and sent social media messages to BSC in an effort to cancel their contracts, all without receiving a satisfactory response. Consumers also testified that BSC continued to charge them for memberships, even after they had submitted cancellation requests. 

Under Massachusetts law, consumers have a right to cancel a contract with a health club without penalty when the club “substantially changes the operation of the health club or location.” The Court found that the indefinite closure of all BSC clubs as a result of the COVID-19 pandemic qualifies as a “substantial change” and gave BSC’s members the right to immediately cancel their contracts without penalty. 

Once payment is received from Walsh, the AGO will determine the best way to return money to impacted consumers. Individuals do not need to contact the AGO at this time to receive payment. 

This matter was handled by Managing Attorney Matthew Lashof-Sullivan, Assistant Attorney General Richard Dohoney, Senior Trial Counsel Peter Downing, and Paralegals Noam Miller and Sarah Most of the AGO’s Consumer Protection Division, State Trial Counsel Jim Sweeney of the Office of the State Trial Counsel, Assistant Attorney General Ann Lynch of the AGO’s Civil Rights Division, and Senior Financial Investigator Colleen McMahon of the AGO’s Civil Investigations Division.

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