NEW YORK -- An online scam involving New York clubs operated by Equinox Fitness, New York Health & Racquet Club (NYHRC) and Town Sports International (TSI) has resulted in an ongoing police investigation.
During the past few months, several people bought what they thought were reduced-rate memberships to these clubs by responding to an advertisement on Craigslist. In January, Ilene Pauer paid $700 for what was advertised as a $2,000-a-year membership to Equinox. However, a month later, Pauer was told that her membership had been canceled.
Pauer corresponded with a man by the name of Darren Johnson, whom Pauer alleges bought the membership with a stolen credit card before transferring the membership into her name. The credit card company notified Equinox of the fraudulent charge a week later, Pauer says, but it took a few more weeks before the club canceled the membership.
About 50 people were allegedly victimized by Johnson, whose operation also included Equinox clubs in Los Angeles, Pauer says. She has been in touch with about two dozen of her fellow victims.
“It makes sense [to transfer memberships] right now in New York,” Pauer tells Club Industry’s Fitness Business Pro. “People get into these contracts, and some of them are losing their jobs and are having to leave. Their explanations seem perfectly logical.”
Pauer says she sent the $700 check to an associate of Johnson’s and that the money was going to be put into an account in Florida. Pauer was sent an Equinox welcome package with a membership card after making the payment.
A statement from Equinox says it does not allow or authorize anyone other than its own employees to sell memberships.
“The security of our members is very important to us, and we encourage people to be mindful when making an unauthorized purchase over the Web,” Equinox said. “In this situation, where we discovered the fraudulent purchase of memberships from Craigslist, we alerted the authorities and are fully cooperating with the investigation.”
Pauer says Equinox offered her one month free and a membership at full price, but she says the general public, at the time, also was offered one month free with a membership. A producer covering the story for TV station WABC in New York then contacted NYHRC about the situation. NYHRC offered Pauer a six-month free membership, which she accepted.
J Travis, brand manager for NYHRC, says the club has a list of about a dozen people who were victims of the online scam. Of those victims, three people signed with NYHRC after they were offered the six-month-free membership, Travis says.
“I’m pretty confident the others will [join] as well,” Travis says.
Memberships can be transferred from one person to another at NYHRC, but the transactions must be done through staff at the club, Travis says. He adds that the scam is a valuable lesson for prospective health club members.
“Do your homework,” Travis says. “If an offer is too good to be true, it probably is.”
New York Sports Club, operated by TSI, also had victims of the scam. The club allows the transfer of memberships, and like NYHRC, transfers must be handled at the club rather than by a third party.
“There are various ways to purchase a membership, including going into a club and buying directly from a membership consultant or purchasing a membership from our Web site,” a statement released by TSI said. “Additionally, if someone is interested in taking over an existing contract, we have a procedure for that as well. Both parties need to come into a club and have the membership transferred and have the proper paperwork filled out by a New York Sports Club membership consultant.”
Pauer says she doubts she will recoup the $700 she paid for the fraudulent membership.
“There’s no warning out there about this,” Pauer says. “We all put notes up on Craigslist warning other people about the scam. It keeps coming up in different guises.”