]]>Friedman vs. 24 Hour Fitness USA, Inc., (Case # 06-06282), alleges that 24 Hour Fitness continues to deliberately take monthly payments out of consumer's accounts after the member cancels membership. The case was filed in U.S. District Court, Central District of California.
The gym insists all members pay their monthly memberships by electronic transfer. It is estimated that 24 Hour Fitness is making $1.6 million a month that it is getting from former members' bank and credit card accounts by defrauding such companies as Bank of America and J.P. Morgan Chase, which process payments via the national financial system networks for electronic fund transfers.
"24 Hour Fitness is the modern day Al Capone, using the electronic banking and credit card system as Al Capone and his mob used the Tommy gun," says Los Angeles trial lawyer Robert L. Esensten of Wasserman Comden & Casselman. "This is exactly what the [Racketeer Influenced and Corrupt Organizations (RICO)] laws were designed to stop. Apparently 24 Hour Fitness's annual revenues of over one billion dollars a year are not enough for its owners, despite the fact that today's consumers are struggling to make every dollar count."
I had this problem about a decade ago. When we cancelled our account, we followed all the rules and kept getting the run around- "oh yes, it's cancelled" or "we still need form X". We asked the bank to stop the payments, but they told us they couldn't unless the gym approved stopping it. In the end, we emptied our bank account and moved to another bank. It was the only way to get out of it. Now we never EVER do direct transfer payments like that.
]]>@catastrophegirl: Another Miller Lite Good Call
]]>@Nighthawke: Common misconception, but the Constitution does not grant, bestow, or create any rights. If you read the amendments, they all contain language similar to 'right shall not be infringed'. One of my favorite is:
Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
Also, businesses don't have any rights protected under the Constitution, just people. Businesses do have to operate within the law though.
]]>I never knew if it was corporate policy or just a couple of thugs at my local gym.
]]>I found that community based gyms or those connected with hospitals or clinics to be less likely to pull membership tricks.
]]>@JeffM:
My membership is up for renewal for a couple of days. I bought a 3 year membership for $500 bucks to all clubs, and now its only $29 a year to renew. My girlfriend has a membership to the same location and pays almost that a month.
II. FACTUAL ALLEGATIONS]]>
Defendant owns and operates more than 385 fitness centers in at least fourteen states, as well as overseas. Fourth Am. Compl. ¶ 15. It has over three million members and annual revenues of more than $1.1 billion. Id.*989 Defendant sells monthly memberships to its clubs. Id. ¶ 16. Within the last four years, Plaintiffs and putative class members signed a form contract containing the same material form language, which stated that they were entering into a monthly membership. Id. ¶ 17. These form contracts contain an integration clause. Id.
Defendant requires each new monthly member to pre-pay the first and "Last Month's Dues" at the time of enrollment. Id. ¶ 18. A consumer terminating a monthly membership owes no further fees upon cancellation because the "Last Month's Dues" are always pre-paid. Id.
Defendant requires that monthly dues be paid by Electronic Fund Transfers ("EFTs"). Id. ¶ 19. EFT allows Defendant to withdraw money from consumers' accounts without the consumers' active participation in effectuating payments. Id. ¶ 20.
Using EFT, Plaintiffs allege, Defendant wrongly charged additional dues after cancellation of monthly membership. Id. ¶ 21. In each case, Defendant acknowledged cancellation, but subsequently made at least one unauthorized post-cancellation EFT "tap" against the (former) member's bank account or credit card account. Id. ¶ 23.
According to the Fourth Amended Complaint, by tapping consumers' accounts after consumers cancelled their monthly memberships, Defendant has committed wire fraud and bank fraud in a manner rising to "an ongoing pattern of racketeering activity." Id. ¶ 81. Defendant perpetrates this pattern of wire fraud and bank fraud through its "association-in-fact" with two outside payment processing companies, Paymentech and LaSalle. Id. ¶ 83. Defendant issues instructions to the payment processors on specific "tap" dates. Id. ¶ 92. These payment processors rely on Defendant's representation in those wire instructions that Defendant is authorized to collect consumers' money. Id. ¶ 94. This RICO enterprise, Plaintiffs allege, is controlled, managed and directed by Defendant "for the common purpose of making enormous illicit profits for Defendant with the unwitting complicity of [Paymentech and LaSalle]." Id. ¶ 88.
I purchased a 1 year membership and it expired without renewing. No complaints, other than each of the 3 locations around me were -always- busy.
]]>Hope these people (the plaintiffs) score big.
]]>