NYSC Settlement Could Mean Repayment For Members

LONG BEACH, NY — New York Sports Clubs members who were charged by the gym during the coronavirus shutdowns last year may finally have a chance to get some of their money back. New York Attorney General Letitia James announced Wednesday that her office has settled a lawsuit with the former parent company of the gym, and is working to secure $250,000 to pay back members.

When gyms were shut down last March at the beginning of the pandemic, most stopped charging dues to members. However, New York Sports Clubs and Lucille Roberts, which were both owned at the time by Town Sports International (TSI), continued to charge members dues. And when people tried to cancel their memberships, the gyms engaged in illegal and fraudulent practices to keep charging people.

Now, James says that a settlement agreement with TSI would provide a fund of $250,000 for potential reimbursement of TSI customers in New York.

“From the beginning of my office’s investigation, I have made clear to New York Sports Clubs and Lucille Roberts that the COVID-19 pandemic would not give them a free pass to violate the law and take advantage of members,” James said in a statement. “A public health crisis did not give these gyms license to lift up their finances through unlawful charges. Today’s agreement holds the former parent company for these gyms accountable and brings us one step closer to recovering a $250,000 bond posted by the parent company for potential distribution to members harmed by their unlawful practices.”

All gyms in New York were ordered closed on March 16, 2020. Despite the closure, TSI gyms continued to charge members. When James's office learned of this in April, it sent a letter to the company demanding changes to its practices.

Despite assurances from the company that its practices would change, they did not. Because of this, the Attorney General's office sued TSI in September, alleging that the gyms violated state laws for charging customers for services they couldn't use, failing to issue reimbursements as promised, imposing unlawful fees on customers, misleading customers about their rights and refusing to honor requests to cancel memberships. As part of the lawsuit, James was seeking to recover a $250,000 bond TSI had posted in 2015 as part of the New York Health Club Services Law. The law requires all gyms to post a bond to provide a source of recovery for members if the gym files for bankruptcy or violates the law. The bond is currently being held by a third-party bond company.

TSI filed for bankruptcy days before the lawsuit was filed. In November, the bankruptcy court approved a buyout by another company of all of TSI's assets. All New York Sports Clubs and Lucille Roberts gyms are now owned by a different company.

The agreement TSI reached with James's office requires the company to forfeit all rights to its $250,000 bond and help the AG's office retrieve the money from the bond company.

Anyone who was improperly charged by the gyms during the pandemic can still file a claim with the Attorney General's Consumer Fraud Bureau. Click here to access the online form to begin your claim. Consumers are encouraged to submit any documentation they have to support their claim.