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Bally Charged with Deceit in Texas

AUSTIN, TX -- Bally Total Fitness says is it is working with the Texas Attorney General after his office charged the company with attempting to mislead former members into paying past due memberships that they do not owe.

The charge came down Tuesday after the office of Texas Attorney General Greg Abbott sent out a press release about the lawsuit.

Bally, which is based in Chicago but also has a mailing address in Norwalk, CA, allegedly mailed more than 11,000 “past due” notices to former members, according to the attorney general, whose office investigated Bally between the summer of 2009 and March 2010.

“While we review the terms of the lawsuit, we are working with the attorney general’s office to reach a swift and amicable resolution,” Bally said in a statement that it released Tuesday afternoon. “Bally prides itself on being a consumer-centric organization, and we continue to implement new procedures that will enhance communications with our members.”

More than 1,000 Texans made payments to Bally, which operates 24 clubs in the Dallas, Houston and San Antonio areas, after receiving the past due notices, the attorney general claims. Bally representatives who were contacted by past members about past due notices acknowledged that the notices were an attempt to get former members to renew their memberships.

Bally’s notices claimed that recipients owed at least one month’s overdue fees for which the notice demanded immediate payment, according to documents filed by the state of Texas. Some of Bally’s past due notices also claimed that failure to remit a payment could result in a negative entry on the former members’ credit reports.

Abbott’s office is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act, as well as restitution for Bally’s former members who suffered financial harm. Abbott also charged Bally with violating the Texas Finance Code by misrepresenting debt to past members.

Abbott’s office has gone after other club companies in the past, including Life Time Fitness, for alleged violations.

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