On November 1, 2017, plaintiffs in a class action against 24 Hour Fitness moved for the court to grant preliminary approval of a $1.5 million settlement over allegations that the fitness center chain carried out a fraudulent and misleading sales campaign related to its prepaid memberships.
In the suit, the plaintiffs claim that 24 Hour Fitness represented that the fees under its prepaid membership contracts for lifetime members would not increase, but after April 2006, the company changed the membership contracts to provide that the annual renewal charge was only guaranteed for one year beyond the initial term. Despite this modification to the prepaid membership agreement, 24 Hour Fitness’ sales representatives continued to assure prepaid members that their dues would remain the same.
Plaintiffs argue that notwithstanding the oral promises of the company’s sales representatives, the gym started increasing its fees for prepaid members in June 2015.
The proposed settlement class is made up of around 255,000 gym members who have maintained a membership with 24 Hour Fitness on or after April 2015. According to the terms of the agreement, class members who have a valid claim are eligible to receive the following: “(a) continued membership at the initial annual renewal amount for so long as the member timely pays and remains a member in good standing, and (b) if he or she has already paid an increased renewal amount, a full refund of the increased amounts paid (i.e., the difference between the initial annual renewal amount and increased annual renewal amount paid).” For those class members that ended their membership as a result of the company’s fee increase, they will be entitled to the initial annual renewal amount.
The case is: In re 24 Hour Fitness Prepaid Memberships Litigation, Case No.: 4:16-cv-01668, in the U.S. District Court for the Northern District of California.
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