Health Club That Took Members' Money, But Never Opened For Business Will Refund Fees
Attorney General Spitzer today announced a settlement with a Suffolk County health club that accepted membership fees from consumers but never opened. This settlement ends an investigation that began last summer after scores of consumers contacted the Attorney General to advise that they had paid for health club services that they were not receiving.
The investigation revealed that during 2002 and the first half of 2003, Flex Fitness, Inc. solicited and received membership fees from over fifty consumers for a health club which was originally promised to open in January of 2003. On several occasions the company pushed back the opening date of the club. Consumers were unable to speak with a health club representative or to be reimbursed their advance fees. To date, the health club has not opened.
The settlement requires Flex Fitness, Inc. to refund all fees received, and bars it from receiving monies from consumers prior to the opening of such clubs unless it places these funds into an escrow account. In addition, the company will pay $5,000 in fines and has agreed to report to the Attorney General its compliance with the law.
"My office will continue to monitor this matter until the company is in complete compliance with the settlement agreement and has refunded all monies collected," said Spitzer.
Under New York State law, all funds received by a health club for services prior to its opening must be placed into escrow. Also, it is illegal for a health club to misrepresent, in any manner, the opening date of the facility.
This investigation was handled by Assistant Attorneys General Alan Berkowitz and Denis McElligott, with the assistance of Debra Siegler, Legal Assistant and Senior Investigators Stephen Boyle and Tom LoFrese.