Attorney General Cuomo Settles With Suffolk Health Club That Took Over $20,000 In Membership Fees And Never Opened
NEW YORK, NY (March 28, 2007) – Attorney General Andrew M. Cuomo announced the settlement of a lawsuit brought against a Farmingville, Suffolk County health club that collected thousands of dollars from hundreds of prospective members but failed to ever open its doors.
As part of the settlement reached March 6, 2007, Flex Fitness, Inc. provided the Attorney General’s office with $21,298 to reimburse 73 of the consumers that paid an advance membership fee to the health club. Flex Fitness will also pay $10,000 in fines to New York State. Other consumers have already been reimbursed by Flex Fitness based on a previous settlement with the Attorney General’s office in October 2003.
According to New York State law, membership fees collected before a health club is operational must be placed into an escrow account. Furthermore, the law also states that when health clubs do not open within one year, all consumers who paid advance fees are entitled to immediate refunds. Flex Fitness failed to comply with both of these laws.
An investigation into Flex Fitness began in the summer of 2002 after the Attorney General’s office received dozens of complaints from consumers who had paid the advance fees and were unable to contact the club operators to get their money back. In 2003, following the investigation, the club entered into an agreement with the Attorney General’s office that required it to provide refunds to all consumers and pay a $5,000 fine.
Despite the agreement, Flex Fitness stalled in paying restitution to all consumers and the Attorney General’s office continued to receive complaints from consumers who had not been reimbursed for the membership fees. After the club missed several deadlines for making the refunds, the Attorney General filed a lawsuit in New York State Supreme Court, Suffolk County against the company in late 2006.
The recent settlement differs from the previous agreement in that it is an Order from the State Supreme Court that carries a fine of twice the original amount and the possibility of further action from the court if there had been a failure to comply. All restitution money was immediately provided to the Attorney General’s office, which has already distributed funds to the affected consumers.
Attorney General Cuomo said, “Flex Fitness charged consumers for services they failed to provide and then tried to avoid justice for over three years. This settlement ensures that these New Yorkers get their hard-earned money back. Individuals and companies that enter into settlement agreements with the Department of Law and then fail to honor them will be held accountable.”
If there are other consumers who believe they are entitled to refunds from Flex Fitness, they are encouraged to contact the Attorney General’s Consumer Helpline at (800) 771-7755.
This case was handled by Assistant Attorney General Alan Berkowitz and Legal Assistant Debra Siegler, supervised by Denis McElligott, Assistant Attorney General-In-Charge of the Suffolk Regional Office.