The franchisee owners of four defunct Gold’s Gym facilities in Baltimore have been ordered to pay $1.3 million in restitution and penalties to 7,555 Maryland consumers.
Maryland Attorney General Brian E. Frosh’s Consumer Protection Division issued a final order to owners Eric and Kary Krieger on May 8. The division charged the two in 2014 for closing locations in Baltimore’s Inner Harbor, Annapolis, Edgewater and Towson in 2010 without providing notice or refunds to customers who paid in advance for long-term memberships.
The club owners also were charged with violating the Maryland Consumer Protection Act and the Maryland Health Club Services Law.
In the order, the Division found that the defunct clubs and the Kriegers misled consumers by continuing to sell memberships and collecting advance membership payments from consumers with no intention of providing services or refunds. The order also cited failure to provide legally required membership records to the Division and failure to pay refunds owed to consumers.
Gold’s Gym and the Kriegers were ordered to return $559,828 to the 7,555 consumers who paid in advance for services never received due to the closing of the clubs. The final order also issued a $1,000 civil penalty for each of the transactions ($755,000).
Legally required bonds and other depositions maintained by the Office of the Attorney General will provide an unspecified portion of the refunds. The Office will also continue to pursue the balance so customers can receive the maximum repayment possible.
“Health clubs can’t keep collecting money from their members if they know they can’t keep their doors open,” Frosh said in a statement. “Consumers pay hard-earned money for these services and we’ll make sure they either get what they paid for or be reimbursed.”
Gold’s Gym did not immediately respond to a request seeking comment for this story.