AG Racine Sues Washington Sports Club for Misleading District Consumers About Membership Cancellation Policies, Billing Practices, and Fees

OAG Alleges Gym Chain Violated 2016 Settlement, Continues to Harm and Deceive Consumers

WASHINGTON, D.C. – Attorney General Karl A. Racine today filed a lawsuit against Town Sports International (TSI), LLC, the operators of Washington Sports Clubs, over its deceptive cancellation and billing practices. The Office of the Attorney General (OAG) alleges that TSI is violating both consumer protection laws and a 2016 settlement agreement by misleading consumers about the terms of membership agreements, failing to inform them of the gym’s cancellation policies, and continuing to charge them even after they attempt to cancel their gym memberships, among other deceptive business practices. OAG is seeking to stop TSI’s illegal conduct, provide relief for consumers who were harmed, and impose civil penalties.

“It’s clear that Washington Sports Club is still making money by deceiving consumers, and that is not acceptable,” said AG Racine. “We are filing this lawsuit to protect District consumers and to warn businesses that if they profit by misleading or hiding information, we will hold them accountable for breaking the law.”

Town Sports International, LLC (TSI) is based in Florida and is one of the largest operators of fitness centers in the country. It operates six locations in the District under the name “Washington Sports Club.” The gyms offer both month-to-month and annual membership plans. TSI often tells consumers that they can cancel their memberships at any time for free; however, TSI actually requires six weeks’ written notice for cancellation and charges cancellation fees.

TSI’s Washington Sports Clubs have previously been investigated by OAG for harming District consumers. In November 2016, TSI entered into a settlement agreement with OAG after an investigation found that they were engaging in deceptive cancellation practices. As part of the settlement, TSI agreed to comply with the District’s Consumer Protection Procedures Act, a law that prohibits a wide variety of deceptive and unlawful businesses practices. TSI also agreed to stop making misleading statements about the gym’s cancellation policies and to clearly inform consumers about how to cancel memberships when they join or renew a membership and when they attempt to cancel.

However, since 2016, OAG is aware of at least 50 complaints from District consumers about TSI allegedly violating the District’s consumer protection law and the terms of the previous settlement agreement. According to OAG’s complaint, TSI:

  • Misleads consumers to convince them to sign up for gym memberships: When consumers consider signing up for memberships, many are concerned about how easily they will be able to cancel. TSI representatives frequently fail to disclose the company’s policies and fees to persuade consumers to purchase memberships.
     
  • Fails to disclose all sign-up fees to consumers: TSI advertises discounted sign-up fees of as low as $1. However, when consumers sign up for memberships, they are charged additional fees that are not disclosed. When consumers request refunds, those requests are denied. 
     
  • Refuses to provide written membership contracts to consumers: TSI does not allow consumers to read membership contracts when signing up and refuses to provide copies of the contracts when consumers request them. Instead, TSI representatives verbally explain the terms of membership agreements—and often make false or misleading statements—then ask consumers to sign on an electronic signing pad without the opportunity to review the contract.
     
  • Fails to inform consumers that memberships auto-renew: When selling annual memberships, TSI tells consumers that they have no obligation to renew after the year is up, leading consumers to believe that the memberships end after one year. It fails to inform consumers that annual memberships automatically convert to monthly memberships after the end of the year. When consumers realize that their memberships have continued, TSI informs them that they must still provide 45 days’ notice to cancel, pay for their membership during that 45-day period, and pay a cancellation fee. TSI also offers trial memberships and fails to inform consumers that they must affirmatively cancel after the trial or they are charged for the membership.
     
  • Misleads consumers about cancellation policies: TSI representatives tell consumers that they can cancel for free and at any time if they have a valid reason. In practice, however, TSI requires forty-five days’ notice to cancel and charges consumers cancellation fees ranging from $10 to $99.95.
     
  • Continues to charge consumers even after they cancel gym memberships: Because TSI makes it difficult for consumers to cancel and fails to inform them of the steps they need to take to cancel, consumers often believe they have done what they need to do to cancel their membership—only to discover months later (or sometimes years later) that they are still being charged. In some cases, members have continued being charged even after receiving emails confirming their cancellation or being told by TSI representatives that their memberships have been cancelled.

A copy of OAG’s complaint is available at: http://oag.dc.gov/sites/default/files/2019-01/Washington-Sports-Club-Complaint.pdf

For Washington Sports Clubs Members Who Were Billed after Canceling
If you were billed by Washington Sports Club after you attempted to cancel your membership, please call the OAG Consumer Protection Hotline at (202) 442-9828.

How to Report Unfair Business Practices
Consumers can learn about their rights when joining gyms or purchasing other memberships at: https://oag.dc.gov/blog/signing-gym-membership-contract-read-it-and-ask. To report scams, fraud, or unfair business practices, you can submit a consumer complaint by calling OAG’s Consumer Protection Hotline at (202) 442-9828 or online through our Consumer Protection Page. 

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