Health Club Chain Agrees to Change Business Practices
Posted April 4, 2007
Raleigh, N.C. — Several health clubs in the Triangle will stop their misleading advertisements and pledge to set aside funds for future refunds, the North Carolina Attorney General's Office announced Wednesday .
Attorneys filed suit against Randall Rohm and Jeff Stec, the former owner and current owner, respectively, of Beyond Fitness, now known as Peak Fitness. The Attorney General's Office claims the company engaged in deceptive advertising.
In fine print below the price, attorneys alleged, an advertisement for the health club chain states that certain restrictions apply and that the price is based on a 24-month paid in full membership. Rather than allowing consumers to pay a monthly fee of $19.99 a month as advertised, they are required to pay $479.76 at the time the contract is signed.
The state Attorney General's Office also alleges the health club chain bounced checks and failed to pay refunds.
A hearing to discuss the issue was scheduled for Wednesday, but the defendants agreed to change their business practices and to make sure that consumers’ contracts include information about the three-day right to cancel.
The defendants will also provide Attorney General Roy Cooper’s office with proof that they acquired bonds for the former Beyond Fitness clubs. North Carolina law requires health clubs to maintain a bond that can be used to pay refunds if a club goes out of business.
Cooper said in a statement that the lawsuit against the former Beyond Fitness clubs will go forward. As part of the lawsuit, he will ask the court to require the companies to turn over copies of all prepaid membership contracts and to provide detailed information about the sale and ownership of the clubs so that the current owner can be held responsible for resolving complaints and paying refunds.
Ten months ago, Wake County authorities shut down a Beyond Fitness in Cary and told members to leave. They also bolted the doors and placed super glue into the locks. Deputies said they closed the gym because Rohm owed a significant amount of rent.
The Attorney General's Office has been investigating the clubs for almost two years and documented hundreds of complaints.