Health clubs to alter ads, set aside refund money

A chain of health clubs facing a lawsuit from the state Attorney General's Office agreed today to change its advertising practices and set aside money to cover future refunds.

The health clubs, formerly called Beyond Fitness, now operate as Peak Fitness. The chain has locations in Raleigh, Fuquay-Varina, Cary, Wake Forest and Garner.

Attorney General Roy Cooper filed suit last week against the clubs, former owner Randall Rohm and current owner Jeff Stec. The lawsuit, which continues, seeks refunds for customers and the cancellation of pre-paid contracts that violated state law.

“These health clubs used tricky advertisements that promised a low monthly rate to lure customers in the door,” Cooper said in statement today. “But customers got hit with long-term contracts and hundreds of dollars due upfront.”

According to the lawsuit, the clubs advertised that members can use 34 locations for $19.99 a month. But fine print in the ad states that the price is based on a 24-month membership. Instead of paying $19.99 monthly, members are required to pay $479.76 upfront.

The health club chain agreed to the changes ahead of a court hearing that had been scheduled today. The Attorney General’s Office had planned to ask a judge to require the chain to change its practices.

The club owners agreed to amend the advertisements and ensure that members' contracts include information about their three-day right to cancel, according to the Attorney General's Office.

The chain will also provide the Attorney General’s Office with evidence of bonds for the former Beyond Fitness clubs. State law requires health clubs to maintain a bond that can be used to pay refunds if a club goes out of business.

The Attorney General's Office said it began investigating Beyond Fitness in 2005 after receiving complaints from unhappy consumers.

Most of the complaints came after Beyond Fitness took money upfront for memberships for a planned location in Wake Forest. The health club sold dozens of prepaid memberships but the location never opened its doors, the Attorney General's Office said.

Thee Attorney General's Consumer Protection Division has recovered more than $50,000 in refunds for 182 consumers who bought memberships for the Wake Forest club that never opened.