In Shape Health Clubs has agreed to settle allegations that it used deceptive membership promotions and other illegal business practices as the company grew from 40 to 70 health clubs between 2010 and 2013, Kern County District Attorney Lisa Green said Thursday.
The settlement states that In Shape will provide thousands of its past and current members with some form of return valued at over $23 million.
The company also agreed to a five year order to comply with California law and pay a $3 million penalty.
The company owns eight health clubs in Kern County.
Any member who signed a contract before February 2016 will be allowed to cancel their membership without penalty.
The CEO of In-Shape Health Clubs Paul Rothbard released the following statement:
In Shape has settled a civil claim brought against the Company by the District Attorneys for
the Counties of Kern, Monterey, and Santa Cruz. The district attorneys’ claims are based on
historical (not current) practices, and In-Shape has not admitted to any wrongdoing.
The allegations primarily relate to the Company’s past marketing practices, its discontinued
membership contracts and past collections procedures, and how it previously processed
membership cancellations. The settlement was reached before litigation began, so there
are no Court findings that In-Shape did anything wrong; we entered into the settlement and
fully cooperated with the district attorneys to avoid the costs and distractions of litigation.
As part of the settlement process In-Shape will be providing certain benefits to members
who may not have been completely satisfied with their gym experience in the past.
Restitution recipients and the amount of restitution were part of the settlement agreement
and those who are entitled will be notified by email or mail. Finally, In-Shape has taken
steps to ensure that current and future members will not be affected by any of the sorts of
business practices alleged by the District Attorneys.
We are pleased to have reached this settlement and look forward to an exciting future for
the company.
