Peak Fitness Settles Lawsuit, Will Alter Business Practices


RALEIGH, NC -- Peak Fitness, which has a chain of 28 clubs in North Carolina, settled a lawsuit with state Attorney General Roy Cooper’s office, resulting in the club company changing its billing and refund policies.

The consent judgment was approved Thursday by a Wake County (NC) Superior Court judge. Peak Fitness will pay Cooper’s office $30,000 for consumer education and investigative costs. Cooper’s office has received around 300 complaints about Peak Fitness over the past five years, according to a press release from Cooper’s office.

In the judgment, Peak Fitness agreed to a number of requirements. The company will designate a single point of contact to handle all consumer complaints, concerns and questions and clearly post contact information for Peak Fitness and its billing company in all Peak Fitness clubs, Web sites and customer contracts.

Peak Fitness will now purchase and maintain bonds for each club it operates in North Carolina. The bonds will be used to pay refunds to members if a club shuts down. The company also will give advance notice to club members and to Cooper’s office as to when a club will close and when members will be transferred to another location.

Peak Fitness also must provide pro-rated refunds to customers of clubs that shut down within 90 days of their closing. Peak Fitness will not sell memberships to any club more than 180 days before it will open.

Peak Fitness must honor lifetime contracts purchased before 1980 at clubs now owned by Peak Fitness. Consumers have 60 days to contact Peak Fitness to get their lifetime contract reinstated if they allowed their lifetime contracts to lapse or entered a replacement contract with the company. Peak Fitness had previously told members that lifetime memberships are illegal.

The judgment also bars Peak Fitness from making any false or misleading statements to consumers. Peak Fitness may not tell members that they can cancel their contracts at any time, that a club will not close or that a new club will open unless it is true.

Suggested Articles:

The new owners of Gold’s Gym International, pending bankruptcy court approval, will be the same company that owns the McFIT brand in Europe.

Town Sports International has closed some clubs, is taking an impairment charge and is in non-compliance with Nasdaq rules.

After a lawsuit to stay a closure order was unsuccessful, Mountainside Fitness CEO Tom Hatten has agreed to comply with an order to close gyms.