NEWARK, NJ — The New Jersey Attorney General's Office and the Division of Consumer Affairs filed lawsuits against 20 health clubs on Aug. 4, alleging that consumers paid for services that they did not receive and that the club operators failed to notify customers of their rights to refunds and other recourse as legally required.
The 20 health clubs are under the names Dolphin Fitness, Olympus Gym, Gold's Gym, Valley Family Fitness and Executive Fitness and are alleged to have committed multiple violations of New Jersey's Consumer Fraud Act, Health Club Services Regulations and Advertising Regulations.
“We don't think this is an industry wide problem,” said Jeff Lamm, spokesperson for the New Jersey Attorney General's Office and the Division of Consumer Affairs. “These specific health clubs were in violation, but we also want folks to be aware that we're out there monitoring the health club industry in New Jersey.”
The state filed six separate lawsuits in State Superior Court in Bergen, Burlington, Essex, Monmouth and Sussex counties in New Jersey that allege several violations including: failure to register some locations with Consumer Affairs and pay the $300 bi-annual registration fee; failure to maintain bond, letter of credit or other security for each location; failure to meet requirements for contracts by failing to include statements about a consumer's right to cancellation of the contract or a refund under certain conditions; charging a down payment exceeding 25 percent of the contract price prior to the opening of the facility; failure to provide refunds to consumers when facilities closed or failed to open; misrepresenting that a facility is registered with Consumer Affairs; and misrepresenting to consumers the number of facilities to which consumers would have access.
New Jersey Attorney General Peter C. Harvey noted in a release about the health club lawsuits that the requirement to post a bond or a letter of credit protects consumers in the event a location closes and refunds are owed.
The lawsuits were brought at the same time because many of the consumer complaints were similar in nature, Lamm said. As of press time, the department was still hearing from consumers and no court date was scheduled. One club had more than 100 complaints so far, Lamm said. The Consumer Fraud Act allows fines up to $10,000 for a first offense and $20,000 for additional offenses.
“Our number one goal is restitution,” Lamm said. “We want people who are owed money from their membership to get restitution. We are also looking for compliance. We don't expect for the clubs that closed to reopen, but for the ones in operation we want a commitment to consumers to be honored.”
Several of the still operating health clubs listed in the lawsuits did not respond to calls for comments as of press time.
The Dolphin clubs located in Sayreville and Jersey City; both are also known as Synergy Fitness. Four more locations were named in the suit — South Brunswick, Rahway, Elmwood Park and Lyndhurst. Those clubs closed in 2004 and 2005.
A Dolphin Fitness Club in Freehold, which closed in October 2004, is named in a separate lawsuit.
The Olympus clubs in Bloomfield, Butler, Clifton, Fairfield, Franklin, Hackensack, Jefferson, Newton and Randolph. All but the Bloomfield, Clifton and Hackensack clubs filed for Chapter 11. The Bloomfield club closed in June 2004.
The Gold's located in Somers Point before it closed in late 2001. Another Gold's was supposed to open in Mount Laurel in mid-2001, but didn't open. Customers awaiting the opening of the Mount Laurel health club had use of a temporary facility that closed in September 2002.
The Valley Family Fitness Center that was located in Old Tappan and closed in January 2005.
The Executive Fitness Club that was located in Green Brook and closed in May 2005.