A.G. Schneiderman Announces Settlement With Synergy Fitness Clubs For Deceptive And Illegal Practices; Highlights Tips For Consumers

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 8, 2016

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A.G. SCHNEIDERMAN ANNOUNCES SETTLEMENT WITH SYNERGY FITNESS CLUBS FOR DECEPTIVE AND ILLEGAL PRACTICES; HIGHLIGHTS TIPS FOR CONSUMERS

Settlement Reached With Health Club With Six Locations In NYC & Nassau County

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement with nine Synergy Fitness health clubs located in New York City and Nassau County to resolve his investigation of their compliance with the state’s Health Club Services Law.  The office received numerous consumer complaints against Synergy alleging the health clubs improperly billed consumers for memberships, misrepresented and unfairly applied their cancellation policies, charged fees that were not part of the contract and were unresponsive to consumer complaints. The health clubs agreed to modify their contracts to comply with New York State law and to pay $60,000 in penalties and fines. 

 “Consumers join health clubs to get fit, not to spend energy avoiding improper fees or dealing with harassing collection calls concerning lawfully cancelled contracts,” said Attorney General Schneiderman.  “We won’t tolerate companies that employ opaque and illegal practices to line their pockets at the expense of New Yorkers.”

The complaints the office received from consumers about Synergy included allegations that:

  • Synergy billed them without their consent or after the expiration or cancellation of their membership term. 
  • Synergy’s collection agent harassed them seeking collection on contracts that were cancelled years earlier.   
  • Synergy misrepresented their cancellation policies and failed to honor consumers’ valid cancellation requests. 
  • Synergy added fees not provided for in their Membership Agreement.   

In addition, Synergy’s Membership Agreement contained provisions and terms that permitted automatic renewals without the consent of the consumer and failed to use the language mandated by statute for notice of cancellation without penalty in violation of the Health Club law.  Synergy also failed to post notices informing customers whether the facility filed a bond with the Secretary of State and how the consumer may obtain proof of the club’s compliance with the law. 

Three of the settling health clubs are no longer in operation.  The six in operation are:

  • Synergy Fitness Astoria, Inc., 23-35 Broadway, Astoria, NY 11106
  • 1781 Fitness Corp., 1781 Second Avenue, New York, NY 10128
  • Pekic Fitness, Inc., 184 Lexington Avenue, New York, NY 10016
  • Garden City Fitness Corp., 190 Broadway, Garden City, NY 11040
  • Farm Fitness, Inc., 410 Conklin Street, Farmingdale, NY 11735
  • ABDO Fitness Corp., 244 East 14thStreet, New York, NY 10003

Under the terms of the settlement, in addition to complying with the terms of the Health Club law, the Synergy Clubs agreed to, among other things:

  • Permit consumers to cancel their Membership by providing reasonable notice to Synergy according to the terms of the contract.  
  • Verify all outstanding balances before they are sent for collection to a third party and transmitting proof of any outstanding balances to the third party collection agency.
  • Cease and desist from engaging in harassing debt collection practices or in any collection activity, including referring to a debt collector, for any services provided after a contract has been cancelled.
  • Establish a review procedure to investigate complaints received from consumers.   

The clubs will also have to provide restitution to consumers who can demonstrate that since January 1 2014, they paid for health clubs services after cancelling their membership. Consumers who seek restitution should contact the club with which they contracted or file a complaint online with the Attorney General’s office or call 1-800-771-7755 by December 1, 2016.

The Attorney General previously reached settlements with nearly 100 health clubs requiring them to modify their contracts to comply with New York law.

Attorney General Schneiderman offered the following tips to consumers when considering a health or fitness club:

  • Before enrolling, ask about fees and when they must be paid, hours of operation, variety and frequency of classes and ability to use multiple locations.
  • Do not give in to high pressure sales tactics or feel obligated to sign a contract immediately.  Tell the health club representative you need time to think about joining the club and ask for free passes to determine if the club is right for you. Talk to other members.
  • If a health club requires you to pay a down payment or pre-pay your dues, ask if it is bonded or has filed the proper financial security to protect you against losses of pre-paid membership dues.  A notice indicating whether it is bonded must be posted conspicuously at the club’s entrance.  (A health club is exempted from this requirement under certain limited circumstances.) To verify a club's compliance with this requirement, consumers can call (518) 474-4429, fax (518) 473-6648 or write to the New York State Department of State, Division of Licensing Services at 84 Holland Avenue, Albany, New York 12208.
  • Look for health clubs that allow members to make monthly dues payments and permits cancellation for any valid reason
  • Make sure you can afford the monthly payments.  Monthly gym fees add up and after any introductory periods are over, the price could jump higher than your budget can handle.
  • Read the contract carefully and make sure that all verbal promises made by the salesperson are included.

This matter was handled by Assistant Attorney General Herbert Israel, Special Assistant Attorney General Stephen Mindell, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, part of the Division of Economic Justice, headed by Executive Deputy Attorney General Manisha M. Sheth.