Defunct Health Club Opens Under New Owner
Attorney General Spitzer today alerted former members of a defunct Erie County health club that a new owner has agreed to honor their pre-paid memberships.
"I commend this facility for honoring the contractual obligations of the defunct health club and for agreeing to provide services to the many victims of the unfortunate situation related to the closing of One On One Health Club," Spitzer said.
One On One Health Club in West Seneca closed without notice to its members in December 2002 leaving more than 1,400 consumers with pre-paid memberships without fitness club services or refunds.
After receiving numerous complaints from consumers, Spitzer's office commenced an investigation that included an effort to assist the club's members by finding a new owner who would honor the members' contracts. As a result of these efforts, Ralph C. Lorigo, a local attorney, has made arrangements to purchase the equipment of the former One On One Health Club and open a new facility, Fitness Factory of West Seneca, at the same location in Southgate Plaza. The new health club is now open.
At the request of Spitzer's office, Fitness Factory of West Seneca has agreed to permit all former One On One members to continue their memberships at its facility for the remainder of their contract.
Spitzer's investigation revealed that the owner of One On One, Peter Cummings, failed to post a performance bond with the state as required by law. Performance bonds protect consumers by providing a pool of money to provide refunds to those individuals who pre-pay for memberships should a health club shut down operations. An investigation into Cummings and the defunct health club continues.
Spitzer also commended M&T Bank, which has a lien on the club's equipment, for its cooperation in the efforts of the Attorney General's office to line up a new owner who would honor the health club memberships.
In March of this year, Spitzer's office obtained a consent order and judgment against another Western New York health club, Advanced Weight Loss & Wellness of America, and its owner, that provided over $14,000 in restitution for more than 40 consumers. Since 1999, the Attorney General's office has intervened in ten cases when health club facilities abruptly closed leaving consumers with pre-paid memberships without a fitness club and without refunds. Through enforcement actions, the office has obtained nearly $225,000 for more than 2,100 consumers who otherwise would have been left empty-handed due to their health club's failure to post the statutorily required performance bond.
Individuals with questions about health club facilities are encouraged to contact the Attorney General's office by calling the consumer help line at (800) 771-7755 or visiting the web site at www.ag.ny.gov.
This case was handled by Assistant Attorney General Dennis Rosen and Senior Investigator Peter Eiss of the Buffalo Regional Office.