Home Courts New York Sports Club told to stop charging cancel fees during crisis

New York Sports Club told to stop charging cancel fees during crisis

New York Sports Club gyms are unlawfully charging cancel fees during the COVID-19 crisis, according to a letter from three state attorneys general to the parent company, Town Sports International Holdings Inc. of Elmsford.

Letitia James for New York and attorneys general for Pennsylvania and the District of Columbia demanded that Town Sports immediately honor cancellations at no cost.

“Neither a national emergency nor dire financial straits,” the April 3 letter states, “relieves TSI of its obligation to follow the law.”

A billboard on Mamaroneck Avenue in White Plains advertising New York Sports Clubs. File photo 

Patrick Walsh, Town Sports’ chairman and CEO, did not immediately respond to an email request for comment.

Though the letter was sent to an Elmsford address, the company is based in Jupiter, Florida, according to U.S. Securities and Exchange Commission Records.

New York Sports Club has 12 gyms in Westchester, Rockland and Putnam counties, including Carmel, Croton-on-Hudson, Dobbs Ferry, Garnerville, Hawthorne, Larchmont, Mamaroneck, New Rochelle, Scarsdale, Somers, West Nyack and White Plains.

It operates as Philadelphia Sports Club in Pennsylvania and Washington Sports Club in the District of Columbia.

The gyms were forced to close March 15 by state executive orders, due to the COVID-19 pandemic.

Most fitness chains responded by immediately freezing memberships at no cost and by promptly notifying members of their actions. Town Sports, according to the letter, did neither.

Instead, it announced on its website that clubs were closed but did not explain how it would handle memberships.

Most of the workforce had been dismissed, so members who contacted the company were unable to reach anyone for more information.

The few who did reach someone were told they could cancel or freeze memberships in person, according to the letter, “which would be impossible, as the clubs were closed,” or by sending a certified or registered letter, requiring them to leave home when they were supposed to stay in place.

Town Sports charged $10 to cancel a membership, according to the letter, and $15 a month to freeze it.

The company’s conduct was particularly disappointing, the letter states, because many members have lost their jobs or seen their incomes reduced, “and need every penny to provide for their basic needs.”

Town Sports is also allegedly contradicting its own policy. Most customers hold month-to-month memberships, according to its most recent SEC filing, and “can cancel their club membership at any time without penalty.”

The practice also violates state laws on charging fees for services that are no longer being provided, through no fault of the members.

“Members have an absolute right to cancel or freeze their memberships without paying any fees,” the letter states.

The attorneys general demanded that Town Sports immediately freeze memberships at no cost and honor cancellation requests by mail, email, and telephone “without charging any fees or imposing any conditions.”

If the company fails to do so, the letter warns, “we will take whatever steps are necessary to protect our citizens and to enforce our laws.”

The letter was signed by Letitia James for New York and attorneys general Josh Shapiro for Pennsylvania and Karl A. Racine for District of Columbia.


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