FTC sues L.A. Fitness operators for "difficult" cancellation policies

The Federal Trade Commission on Wednesday sued the operators of the popular gym franchise L.A. Fitness and other gyms for allegedly subjecting members to what it called "exceedingly difficult" cancellation policies.

Filed in California federal court, the lawsuit accused Fitness International and Fitness & Sports Clubs of intentionally using complicated cancellation procedures to prevent their customers from ending their gym memberships and other recurring charges. The California-based companies "have illegally charged hundreds of millions of dollars in unwanted recurring fees" as a result, the FTC said in its complaint.

Fitness International and Fitness & Sports Clubs run gym chains including L.A. Fitness, Esporta Fitness, City Sports Club and City Studio, according to the FTC, which said they collectively operate more than 600 gym locations and have upwards of 3.7 million members nationwide.

"The FTC's complaint describes a scenario that too many Americans have experienced – a gym membership that seems impossible to cancel," said Christopher Mufarrige, the director of the Consumer Protection Bureau, in a statement released by the trade commission. "Tens of thousands of LA Fitness customers reported difficulties – cancellation was often restricted to specific times or required speaking to specific managers who were often not present or available."

Both companies offer gym memberships for fees as low as $30 per month and as high as $299 per month, and require customers to pay for the first and last month of their memberships upfront before incurring monthly dues and annual fees, the FTC said. In its complaint, the commission detailed "restrictive" and confusing cancellation requirements, with an in-person process that's difficult to access being one method, and a mail-in process being another.

"Each of these cancellation methods is opaque, complicated, and demanding—far from simple," the complaint said. "In particular, Defendants have not adequately disclosed how to cancel when consumers are signing up for their memberships and have presented different, often contradictory, cancellation requirements during sign up, in membership agreements, and on the Defendants' websites."

Fitness International addressed the lawsuit in a statement, saying "the allegations are without merit" and its leadership was "disappointed that the FTC has chosen to pursue this complaint."

"It is important to note that most of our memberships, and all of our personal training memberships, are purchased in person at our club locations," said Jill Hill, the president of club operations at Fitness International, in the statement. Hill said the company also complied with the FTC's now-void "click-to-cancel" rule that aimed to make it easier for consumers to cancel recurring subscriptions and memberships.

Although the rule did not take effect, Hill said Fitness International has maintained an online program for members to cancel their subscriptions, in addition to the in-person and mail-in options.

"Our company works diligently to comply with all health club state laws regarding membership cancellations and to offer at a minimum every cancellation method specifically required by each state," Hill said. "Over the years, the company has taken many steps to improve its enrollment and cancellation processes."

• Lawsuit
• Federal Trade Commission