Arthur Murray Dance Studios To Modify Business Practices
Attorney General Spitzer today announced a settlement with Arthur Murray International, Inc., the franchisor of Arthur Murray dance studios in New York. Under the settlement the company is prohibited from billing consumers in advance for dance lessons costing more than $500. Instead, the company has agreed to comply with New York law by charging students for dance lessons on an installment basis, as lessons are provided. Arthur Murray International will pay $25,000 to cover the costs of the investigation.
"With the growing popularity of ballroom dancing, more and more consumers are taking expensive dance lessons," Spitzer said. "This agreement compels the Arthur Murray studios to obey the law and restricts their ability to charge customers substantial up front fees before lessons are actually provided."
Spitzer's office began an investigation of Arthur Murray International following a similar settlement in August 2000 with New York Dance Enterprises, Inc., the franchisor of 14 Fred Astaire Dance Studios in New York. Together, the settlements protect consumers against having to pre-pay for lessons that may never be provided.
In addition to revising its contracts to provide for installment payments, Arthur Murray will notify franchisees that they are prohibited from accepting any new payments from students who currently have more than $500 on deposit until the balance is equal to or less than $500.
The 16 Arthur Murray dance studios in New York State offer adult ballroom dance instruction to approximately 6,000 enrolled students.
The case was handled by Assistant Attorney General Doris Morin of the Attorney General's Westchester Regional Office, which is under the supervision of Assistant Attorney General in Charge Gary S. Brown.