Curves, Gold's Gym, Snap Fitness and World Gym were among 20 health clubs assessed a total of $158,500 in fines last week for alleged state law violations by the New Jersey Division of Consumer Affairs.
The administrative actions against the clubs were announced by the New Jersey Division of Consumer Affairs in a March 31 media release. The clubs, which received various fines for alleged failure to register, alleged failure to maintain bond and alleged failure to post information violations, are listed at the bottom of this page.
"Consumers who pay for health club memberships deserve the assurance that they're signing contracts with clubs that are properly registered and operating in accordance with the law," Robert Lougy, acting attorney general, New Jersey, said in a statement. "The clubs we cited have allegedly failed to comply with the laws designed to protect consumers. We're sending a message to them that we won't tolerate such non-compliance."
The Division of Consumer Affairs worked with the New Jersey Division of Law to issue Notices of Violations to all 20 clubs for failing to register their businesses. The Notices of Violation arose from the Division's site visits to 23 health clubs statewide to observe facilities and business operations, to obtain copies of contracts and other documents, and to compare that information with state registration records.
The state of New Jersey has handed out fines for similar reasons to other health clubs in the past few years. In April 2014, the Division fined 53 health clubs in the state a total of $283,500. Thirty-one of the clubs were fined for not being registered, and 22 were fined for selling longer-term contracts without having a security bond or letter of credit. In September 2014, the Division fined five health clubs a total of $31,000, some of the violations being for non-registration.
New Jersey state law requires registration with the Division of Consumer Affairs for all health clubs that devote at least 40 percent of floor space to physical fitness services. Those clubs also must provide information regarding ownership and operations. Each Notice of Violation carries a $5,000 penalty. In this most recent round of fines, Bolero Spa in Wildwood and World Gym in Dunellen were assessed an additional $5,000 penalty due to previous registration violations.
Each club that received a Notice of Violation has three options to respond to the allegations. In one option, a club operator may acknowledge the conduct, agree to comply with the law, and pay the assessed civil penalty. In another option, a club operator may request a mitigation conference in front of the Division to consider mitigating circumstances before rendering a final decision. A club operator also may contest the charges and request a formal administrative hearing.
Of the 20 clubs, nine allegedly violated New Jersey consumer laws by selling longer-term contracts to consumers without maintaining a required bond, letter of credit or other form of security acceptable to the Division of Consumer Affairs. Those nine clubs were each assessed an additional $5,000 penalty.
Fourteen of the 20 clubs were cited for allegedly failing to conspicuously post a notification of consumers' rights. Those clubs were each assessed an additional $250 penalty.
"When it comes to joining a health club, consumers shouldn't have to worry that getting healthy will hurt them financially," Steve Lee, acting director, New Jersey Division of Consumer Affairs, said in a statement. "They have a right to expect their club is properly registered and properly bonded so they won't lose money on a long-term contract should the club go out of business or violate contracts with the consumer."
In January, 96 clubs agreed to a settlement with the New York Attorney General's Office related to what the state said were violations of the New York Health Club Services Law and the General Obligations Law.
Health Club Violations Chart