This week, the New York State Attorney General (the “Attorney General”) announced that it had settled with nine Synergy Fitness (“Synergy”) health clubs over alleged deceptive and improper billing practices. Specifically, the Attorney General alleged that Synergy improperly billed consumers for membership and also misrepresented and unfairly applied their cancellation policies in violation of the New York State Health Club Services Law. Among other settlement terms, Synergy agreed to modify its consumer contracts and will pay New York State $60,000.00 in penalties and fines.
What are the Terms of the New York Attorney General Health Club Settlement for Improper Billing?
New York Attorney General Settles with Synergy Fitness Health Clubs for Improper Billing
According to the Attorney General, Synergy improperly billed consumers without their consent or after the expiration or cancellation of their membership terms. The Attorney General also alleged that Synergy’s collection agents harassed consumers seeking payment on contracts that had often been cancelled years earlier. Synergy is alleged to have also misrepresented its cancellation policy and added fees not provided for in its membership agreements, thus failing to honor valid cancelation requests.
As a result of the settlement, Synergy will permit consumers to cancel their respective memberships by providing reasonable notice to Synergy. In the future, Synergy must verify all outstanding balances before they are sent to a third party for collection. Synergy has agreed to cease and desist from engaging in harassing debt collection practices and from attempting to collect on previously cancelled contracts.
We recently blogged about the Attorney General settling deceptive advertising claims against two separate companies that sold products, ranging from women’s undergarments to pillows. This increase in activity indicates that the Attorney General is aggressively policing the commercial practices of companies that operate in New York State. It is important, therefore, to consult with competent counsel prior to marketing to New York State consumers.