FTC sues LA Fitness operators for 'exceedingly difficult' gym cancellation policies

Key Points

• The FTC is suing LA Fitness operators for making gym membership cancellations "exceedingly difficult," resulting in consumers facing unwanted recurring fees.
• Consumers have reported that the cancellation processes require complicated steps like in-person visits or mail submissions, which often come with additional challenges.
• The lawsuit specifically mentions that relevant information about cancellation options is inadequately disclosed to customers at the time of signing up for memberships.
• The FTC is seeking a court order to stop these practices and provide refunds to affected consumers as part of the litigation against Fitness International.

NEW YORK (AP) — The U.S. Federal Trade Commission is suing the operators of LA Fitness, over allegations that they make it “exceedingly difficult” for consumers to cancel gym memberships and other related services offered in their clubs nationwide.

In a Wednesday complaint, the FTC accused Fitness International and its subsidiary Fitness & Sports Clubs of illegally charging consumers “hundreds of millions of dollars in unwanted recurring fees” as a result of cumbersome cancellation processes. The agency said that tens of thousands of customers have reported difficulties with these policies to date.

“The FTC’s complaint describes a scenario that too many Americans have experienced — a gym membership that seems impossible to cancel,” Christopher Mufarrige, director of the agency’s Bureau of Consumer Protection, said in a statement.

Beyond LA Fitness, California-based Fitness International operates brands like Esporta Fitness, City Sports Club, and Club Studio — spanning across more than 600 locations with over 3.7 million members nationwide. And the FTC pointed to two “unfair and unlawful” cancellation processes that it says these gyms have used for years: in-person cancellation or cancellation by mail.

Both of these options require consumers to print out a form on the gym’s website, which includes logging in with credentials that the agency says some customers don’t have or remember. And if a customer opts for in-person cancellation, there’s limited hours and often difficulty finding a manager to process the forms, the complaint notes — while mailing the form comes with additional costs.

“Each of these cancellation methods is opaque, complicated, and demanding — far from simple,” the FTC writes in its complaint. It also alleges that the company doesn’t adequately disclose cancellation offerings when consumers sign up for memberships, and that some will be signed up for additional services with recurring charges without realizing there may be different cancellation requirements.

According to the FTC, Fitness International now offers website cancellations for subscriptions “with stand-alone agreements” — but the agency said the process “still imposes unnecessary burdens” on customers and claims that that option is buried online. It’s also still not possible to cancel memberships on the company’s mobile apps, the FTC added.

Jill Hill, president of club operations at Fitness International, expressed disappointment in the FTC’s decision to pursue litigation — and said that the allegations were “without merit” and that the company was confident that it would prevail in court.

In a statement, Hill noted that the statute that the FTC relied “was designed to address only online retail transactions, does not require any specific method of cancellation, and has never before been applied to the health club industry.” She added that Fitness International “proactively launched” its online cancellation process 18 months before the FTC’s “click to cancel rule” was set to take effect.

“With just a few clicks, members may cancel online — a step we voluntarily implemented well ahead of regulatory deadlines,” Hill said, adding that the company chose to keep this offering in effect “to provide members with yet another simple way to cancel.”

This isn’t the first time that federal regulators have accused gym operators — and other companies with subscription services — of making their cancellation processes too difficult for consumers.

Under the Biden administration, the FTC adopted a “click to cancel” rule, which would have made it easier for consumers to end unwanted subscriptions. But last month, days before that rule was poised to go into effect, a federal appeals court blocked the proposed changes.

In its litigation against Fitness International, the FTC says it’s seeking a court order prohibiting the allegedly unfair conduct and money back for consumers who were harmed by difficult cancellation processes.