Bally’s Fitness Agrees To Settlement In Misleading ‘Past-Due’ Mailings

August 31, 2010

California-based Bally Total Fitness today signed an agreed judgment with the Texas Attorney General’s Office that prohibits the fitness firm from continuing to send former members misleading “past-due” mailings.

Under today’s agreement, Bally must provide refunds to Texans who were deceived into paying fees they did not actually owe and who did not utilize the company’s fitness facilities.

Bally operates 24 fitness centers in and around the Dallas, Houston and San Antonio areas, including one in the West U area.

An investigation by the AG’s Office revealed that between summer 2009 and March 2010, Bally mailed more than 11,000 misleading “past due” collection notices to former customers in an attempt to encourage them to rejoin their former gym. The collection notices created the false impression that former members owed Bally outstanding membership fees.

The notices were actually an attempt to get former members to renew their memberships.

Today’s judgment also includes an injunction prohibiting Bally from indicating that current or former members owe a balance unless the balance is actually owed. Bally was also enjoined from claiming harmful information may be submitted to a credit bureau when Bally’s records do not support such a representation.

According to records obtained by the state, more than 1,000 Texas residents made payments to Bally after receiving the misleading past-due collection notices.

Under today’s agreement, Bally will send out settlement notices to customers who are automatically eligible for restitution. Any customers who do not receive a notice but believe they are entitled to restitution should file a complaint with the Texas Attorney General’s Office.

The notices that led to the state’s enforcement action indicated that recipients owed “past-due” fees under Bally’s “Value Plan” – fees for which the notice demanded immediate payment. Some of Bally’s past due notices even claimed that failure to remit a payment could result in a negative entry on the former members’ credit reports.

The AG’s legal action charged Bally with attempting to confuse its former Value Plan members with deceptive bills so they would make payments that were not actually owed. The payments were actually applied to reinstate a lapsed membership former clients did not want.

For its part, Bally denied any intentional wrongdoing. Company spokesman Pete Marino said the company decided to settle the claim to avoid “the cost and disruption of litigation.”

“Although Bally denies all allegations made by the Texas Attorney General’s office, we have chosen to resolve this matter consensually in order to minimize the cost and disruption of litigation,” Marino said. “Notably, our settlement does not involve any finding of any wrongdoing on the part of Bally, nor were any civil penalties imposed.  We are pleased to put this matter behind us so that we can continue to focus on enhancing our member experience.”

Anyone believing they have been deceived by similar fraudulent business practices may call the Office of the Attorney General’s toll-free complaint line at 800-252-8011 or file a complaint online at www.texasattorneygeneral.gov.

InstantNewsWestu Staff

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