Attorney General James Sues New York Sports Club
Attorney General James Sues New York Sports Club and Lucille Roberts over the illegal charging of dues and preventing consumers from removing memberships.
NYSC as well Lucille Roberts The New Yorkers were charged Fees, While Gyms were shut down due to COVID-19.
NEW YORK New York New York Attorney General Letitia James today filed a suit in the name of the parent company of New York Sports Clubs (NYSC) and Lucille Roberts for illegally charging members monthly fees and engaging in various fraudulent and illegal practices that violate cancellation rights of members. in her action with Town Sports International Holdings, Inc. (TSI Holdings) and Town Sports International, LLC (TSI LLC) together TSI the Attorney General James asserts that the company violated the law when it continuing to bill consumers for fees and dues regardless of the fact that every gyms and health clubs across the country were shut down due to the coronavirus infection 2019 (COVID-19) outbreak began to spread throughout New York in March.
Following the time that attorney general James wrote the company an email at the beginning of April, promising to take the necessary steps to safeguard customers, TSI implemented a freeze of dues and membership fees on April 8th, 2020. They also assured consumers that they would offer credits in the future. however, by September 1st in 2020 the company illegally began charging customers but never gave them the credits they promised and was even charging certain consumers who belong to clubs that are yet to be opened. As part of the ongoing proceedings, Attorney General James also wants an order of temporary restraining to stop immediately TSI from charging fees or fines in the name of New York members who submitted cancellation requests or charging fees or fines to those in New York whose primary -or home gym is still closed. It is subject to approval by the court.
Attorney General James Statement:
“Since the outbreak of COVID-19 began, New York Sports Clubs and Lucille Roberts have been doing everything they can to violate their obligations and profit of their members,” said Attorney General James. “Time and time again they have tried to boost their financial situation, which is in dire need of improvement, through the expense of their members, while the members of these gyms were suffering under the burden of financial burdens. Today’s suit is aimed at ending the TSI’s unlawful efforts to run its members through the mud, just to identify the bottom of its business.”
Beginning on March 16th, 2020 through August 24 in 2020 All gyms in New York were closed by executive order in response to the COVID-19 virus. However, unlike the majority of fitness centres that were closed in New York that automatically froze memberships for free for members until gyms reopened, TSI did not automatically shut down memberships and didn’t offer to freeze memberships if consumers demanded to the company to do the same.
If consumers called TSI to request a cancellation or freeze -in the very rare instance when they did get through they were told that TSI offered a variety of different and frequently inaccurate information to prevent customers from cancelling, like providing information that said cancellations were subject to 45 days advance notice deadlines and were are subject to a cancellation process of $10 or $15 charges.
Despite the fact that all New York clubs being closed in March, TSI went ahead and it charged its members for the dues for April. At the beginning of April, Attorney General James wrote to TSI and reminded the company that the New York Health Club Law authorizes gym members to withdraw their membership at any time services are no longer offered because of a significant shift in operations. On April 8th, 2020 TSI stated that it has imposed the membership freeze without costs to the customers and also stated that “members will be provided with additional membership days in proportion to the number of days that they have paid for during the time they were in a closed club in their local area.” TSI also advised members that they can cancel their membership on the internet and receive an email with a confirmation.
But, despite these assurances after certain TSI clubs reopened the 24 and 25, 2020 however, the company began to open around on or around September 1, 2020, and, without any notice to members, the September dues were charged, even charging those who attempted for cancellation of their membership, or who had their home gyms closed, thereby putting at risk members’ safety. TSI also forced many members to travel on public transportation in order to go to another gym in the farthest location from their home.
On the 14th of September, 2020 TSI LLC and other subsidiaries of TSI Holdings filed petitions for bankruptcy. TSI Holdings has not filed for bankruptcy. On the very same day, TSI made a move to deny certain leases, which included leases of the nine NYSC places within New York, for which TSI LLC has already relinquished the keys. There is no evidence to suggest that TSI excluded members from these nine gyms permanently shut from being charged the September dues, or that they’ve been in contact with members regarding cancellation of their memberships prior to the time that the October dues start to be charged.
So far, TSI has refused to refund member dues during the period between the 16th of March, 2020 until April 8th, 2020, during which members were charged dues in spite of having all NYSC facilities were shut. In addition, in contrast to the promises made on April 8th the 8th of April, 2020 TSI has not appeared to have provided members with any credits during the March-April period during which facilities were beginning to reopen in the month of August.
In the lawsuit filed today Attorney General James accuses TSI of violating various New York state laws by charging members dues for services not provided and failing to provide credit in the manner promised; imposing unconstitutional charges and prior notice requirements on cancellation requests, misleading customers on their options to cancel members; as well as refusing to accept cancellation requests.
Attorney General James’ suit seeks to stop TSI from infringing New York law, including however not only charging customers dues for clubs that haven’t yet reopened, or failing to offer credit for the time period beginning March 16, 2020, until April 8, 2020, and not honouring the rights of consumers under the law to terminate their contracts; Restitution to New York consumers; disgorgement and penalties; in addition to the transfer bond amounting to $250,000 TSI that was issued under the Health Club Law to the OAG.
The New York Health Club Law authorizes gym members to end their membership at any time under certain conditions which include “after that the services are no longer offered or are not available in the manner specified in the contract due to the gym’s permanent cessation of operations or a significant alteration in the operation” and also requires gym owners to offer the refund prorated for cancellations within fifteen days. Furthermore, the law restricts misleading statements regarding cancellation rights for consumers.
In addition, The Health Club Law requires that gyms and health clubs sign bonds, letters of credit, or a certificate of deposit that is payable to the citizens from the state of New York for the benefit of any injured member when the facility ceases to operate before the expiration date of the contract of the member or fails to offer a refund once the member has cancelled under the Health Club Law.
TSI manages and owns nearly 100 fitness and gyms located in New York state doing business under the brand names New York Sports Clubs and Lucille Roberts.
This issue is being dealt with by Assistant Attorney General Christopher McCall, Deputy Bureau Chief Laura J. Levine, and Bureau Chief Jane M. Azia -All members of the Consumer Frauds and Protection Bureau. This Consumer Frauds and Protection Bureau is composed of the Division for Economic Justice, which is headed by Chief Deputy Attorney General Chris D’Angelo and which is managed by the First Deputy Attorney General Jennifer Levy.
Latest Update On This Case:
- NY Sports Club’s Owner Settles AG Lawsuit After COVID Membership Scandal.