Tuesday, June 8, 2010
Attorney General Abbott Charges Fitness Center Operator With Unlawfully Deceiving Texas CustomersAUSTIN – Texas Attorney General Greg Abbott today charged Bally Total Fitness Corp. with unlawfully attempting to mislead its former customers into paying “past due” membership fees they do not owe.
Bally Total Fitness Corp., based in California, operates 24 fitness centers in and around the Dallas, Houston and San Antonio areas. An investigation by the attorney general’s office revealed that between summer 2009 and March 2010, Bally mailed more than 11,000 misleading “past due” notices to former members in an attempt to encourage them to rejoin their former gym. The notices created the false impression that former members had outstanding dues that needed to be paid.
|Attorney General's lawsuit against Bally Total Fitness Corp.|
|Sample of fraudulent "past due" notice|
More than 1,000 Texans made payments to Bally after receiving the past due notices. However, company representatives who were contacted by past members about past due notices acknowledged that the notices were not a collection effort, but rather an attempt to get former members to renew their memberships.
According to court documents filed by the state, Bally’s notices claimed that recipients owed at least one month’s overdue fees – fees for which the notice demanded immediate payment. Some of Bally’s past due notices even claimed that failure to remit a payment could result in a negative entry on the former members’ credit reports. Today’s enforcement action charges Bally with attempting to confuse its former members with deceptive bills so they would make payments that were not actually owned – thus effectively reinstating a previous membership.
The attorney general is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act, as well as restitution for Bally’s former customers that suffered financial harm. The attorney general also charged Bally with violating the Texas Finance Code by misrepresenting the “debt” to past members.
Texans who believe they have been deceived by similar fraudulent business practices may call the Office of the Attorney General’s toll-free complaint line at (800) 252-8011 or file a complaint online at www.texasattorneygeneral.gov.