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Urban Active Faces Lawsuit, Responds to BBB Rating

Urban Active Faces Lawsuit, Responds to BBB Rating

Urban Active says it cannot comment on a recent lawsuit, but it is attempting to resolve complaints filed with the Better Business Bureau (BBB) of Central Ohio, which last week issued the Lexington, KY-based company an “F” rating.

An amended version of the lawsuit was filed Tuesday in Franklin County (OH) Common Pleas Court. The complaint was originally filed last Wednesday on behalf of Ohio resident Amber Gascho. The amended version includes Ohio residents Ashley Buckenmeyer and Michael Hogan on behalf of themselves and all other similarly situated plaintiffs.

Gascho, Buckenmeyer and Hogan claim Global Fitness Holdings LLC, Lexington, KY, which does business as Urban Active, violated the Ohio Consumer Sales Practices Act and the Ohio deceptive trade practices act and breached a contract. The plaintiffs, represented by the law firm of Vorys, Sater, Seymour and Pease LLP, Columbus, OH, are seeking an award of damages of more than $25,000. The lawsuit is seeking class-action status for all Ohio Urban Active members who purchased membership contracts from Nov. 1, 2007, to the present.

Specifically, Gascho, Buckenmeyer and Hogan allege that Urban Active:

  • Misrepresented the terms and duration of its membership contracts, personal training contracts and other contracts for services.
  • Misrepresented customers’ cancellation rights.
  • Failed to notify customers of their cancellation rights as required by law.
  • Failed to provide customers with copies of contracts at the time of signing as required by law.
  • Failed to honor notices of cancellation.
  • Continued to charge customers after cancellation.
  • Failed to inform customers of hidden $15 “maintenance fees,” which increase the cost of its membership contracts.
  • Failed to provide customers with personal training sessions as contracted for in their agreements.

Gascho claims that Urban Active told her that she could cancel her personal training contract for a $10 fee, but when she tried to cancel the contract, she was told the charge would be $250, according to the complaint. Buckenmeyer claims that an Urban Active personal trainer pressured her into signing a contract, but after she tried to cancel the contract four hours later, Urban Active refused to cancel the contract and continues to charge her bank card, according to the complaint.

Like Gascho and Buckenmeyer, Hogan claims he was not advised of his cancellation rights, nor was he provided with duplicate copies of a notice of cancellation form. Hogan claims that he tried to cancel his Urban Active contract in October 2010, yet his bank card was still being charged through last February, according to the complaint. Hogan was charged more than $100 in additional fees after he resent a notice of cancellation, fees that Hogan claims Urban Active has refused to refund.

John Gragg, general counsel for Urban Active, says the company does not comment on litigation, but he did tell Club Industry that the company “will vigorously defend our good name.”

The lawsuit comes on the heels of a release from the BBB of Central Ohio, which says it has received more than 200 complaints from Ohio Urban Active members within the last year. Of those complaints, 78 of them were either unanswered or unresolved, as Urban Active did not respond to written requests for explanation, the BBB said.

“We’re aware of the complaints that have been filed, and we’re aware that people are frustrated and that it’s taken a while to respond to concerns,” Gragg tells Club Industry. “Our goal is to provide the best fitness experience, and we take any complaints very seriously.”

Most of the complaints deal with billing issues. Specifically, members have complained that Urban Active continued to charge their bank accounts or credit cards after the members believed that their contracts had expired or had been canceled.

“The trends we’re seeing in complaints against Urban Active tell us consumers need to read the fine print on the contract before they sign and keep a close eye on their bank statements to insure they’re not getting billed more than they should,” Kip Morse, president and CEO of the BBB Central Ohio, said in a statement.

The Lexington Herald-Leader reported last week that the BBB of Central and Eastern Kentucky also has given Urban Active an “F” rating. That chapter has processed 93 complaints against Urban Active over the past three years, with 62 of them resolved, the newspaper reported.

Gragg told media outlets last week that the complaints represent less than half of 1 percent of the company’s overall membership base.

“We apologize to our customers who have experienced problems,” Gragg says. “We’re working diligently to resolve these issues by promoting more personnel to provide better customer service. We’re also working with all of the Better Business Bureaus to resolve these issues as well.”

Gragg adds that Urban Active had taken steps to resolve these issues before the BBB Central Ohio released its report.

“Every one of those cities that we have BBB issues, year in and year out, we’re unanimously voted the top health chain of that market,” Royce Pulliam, CEO of Urban Active, tells Club Industry. “We know we’ve got a few customer service issues that we’ve got to get under control, and we’re going to put forth all our best efforts to make sure that we do so. We do have a few things to be better at, and we’re going to be better at it.”

Urban Active has 34 clubs in operation, primarily in Ohio, Kentucky and Tennessee. The company also has expanded into Pittsburgh, Omaha, NE, and Charlotte, NC. Last year, Urban Active closed two of its clubs in Cincinnati and a club in Brentwood, TN.

Gragg confirmed that Urban Active will open two new clubs in July, one in the Buckhead section of Atlanta and the other in Dublin, OH. He adds that Urban Active also is considering seven to 10 other locations for development.

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