This is a consumer class action lawsuit brought against Bally Total Fitness, Holiday Universal, Scandinavian Health Spa on behalf of Pennsylvania residents who bought certain types of memberships from these health clubs.
For example, In February 2002, one consumer visited the Bally Total Fitness Club located at 3400 Aramingo Avenue, Philadelphia, Pennsylvania, and entered into a Retail Installment Contract prepared by the Health Clubs for a "Premier" family membersip for herself and her minor son. The terms of her contract allegedly required her to pay a "Membership Fee" of $632.00, of which she paid $100.00 down and financed the balance at an annual percentage rate of 17.50%, with monthly payments of $19.10 for 36 months. She was further obligated to pay "Monthly Dues" of $2.60 for a total monthly payment of $21.70. The membership renewed automatically.
Another example is October 2002, another consumer visited the Bally Total Fitness Club located at 3000 Oxford Drive, Bethel Park, Pennsylvania and entered into a Retail Installment Contract prepared by the Health Clubs with Scandinavian for a fitness club membership. He allegedly was charged a membership fee of $1,275.00. This consumer made a down payment of $100.00 and financed the balance of $1,175 at an annual percentage rate of 13%, with monthly payments of $39.75 for 36 months, including "Monthly Dues" of $3.00 per month. Both consumers entered into the contracts for health club services for personal, family or household purposes.
The upshot of the Complaint is that the Health Clubs violated Section 2165 of the HCA by charging grossly excessive initiation fees. Section 2165 provides, in relevant part, that the amount of any initiation fees imposed by a health club shall be reasonably related to the club's costs for establishing the initial membership[, and] shall not be imposed for the purpose of circumventing the requirements of this act.
Name (Stock Symbol)
Bally Total Fitness
Bally Total Fitness owns and operates, or franchises to third parties, fitness gyms throughout the country.
Holiday Universal operates fitness centers.
Scandinavian Health Spa
Scandinavian Health Spa is a franchise for a health and fitness club.
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