Attorney General Issues Refunds For Members Of Defunct Westchester Health Club

Attorney General Spitzer announced today that refund checks will be sent to New York consumers who were members of a now-defunct Westchester health club. Metrofit Athletic Club closed abruptly in March 1997, but failed to issue refunds to consumers for the unexpired portion of their memberships.

After numerous consumers filed complaints with the Attorney General, an investigation revealed that the club had failed to post a bond with the Secretary of State, as required by New York law. The bond is intended to protect consumers from losing their membership fees in the event that a club goes out of business. Although certain clubs are exempt from the bonding requirement, Metrofit did not qualify for an exemption.

As part of a settlement with the operator of the health club, California-based Club Services Corp., 26 consumers will receive a total of $7,400 in restitution. In addition, the company agreed to pay an additional $2,500 in costs and penalties.

"Consumers should not have to risk their down payments, which at times can be substantial sums of money, when they join health clubs," said Attorney General Spitzer. "As a result of this settlement, the former members of Metrofit Athletic Club will receive the refunds to which they are entitled."

In one case, a New Rochelle man paid nearly $300 for a one-year membership just a few weeks before the club closed its doors without warning. In another case, a woman joined Metrofit a few months before its closing at a cost of nearly $400.

In addition to bonding requirements, State law provides numerous protections for consumers such as: requiring all payments received prior to the opening of a health club to be invested in an escrow account in case the owner fails to open or complete the facility within one year; and providing consumers a three-day right to cancel after signing a contract and an additional three-day right to cancel if a person becomes significantly physically disabled, moves more than 25 miles away, or if services are no longer available or substantially not available through the health club.

State law also limits the maximum cost of a health club contract to $3,600 per year and requires that any installment plans have substantially equal periodic payments. "Life-time contracts" are prohibited as well by limiting contract terms to 36 months with the consumer's option to renew within 30 days after its expiration.

In announcing the settlement, Attorney General Spitzer urged consumers to find out whether a club is bonded before signing a membership contract. To verify whether a particular club is bonded, consumers may contact the Secretary of State, Division of Licensing Services, at 518-474-4429. Consumers may also ask a club for proof of compliance.

Individuals interested in learning more about the settlement with Metrofit Athletic Club or who have questions or complaints about other health club memberships are encouraged to call the Attorney General's Consumer Helpline at 1-800-771-7755 or visit the Department of Law's web site at http://www.ag.ny.gov/.