Thousands of current and former members of In Shape Health Clubs will receive part of a $26 million settlement with Monterey, Santa Cruz and Kern Counties over alleged violations of state business codes and consumer protection laws.
The total settlement runs $26 million and ends legal action against the health club for unfair business practices, false advertising and deceptive membership programs.
Without acknowledging liability, In Shape agreed to provide $23 million in different forms of restitution to past and current members and pay a $3 million dollar penalty. The health club will also be bound by a 5-year injunction to prevent future unfair practices.
The multi-county investigation began in 2014 in response to complaints that In Shape sold “free” services without fully disclosing membership terms, refused to accept cancellation requests, issued unauthorized billing statements and pursued collections on invalid debts. The alleged violations occurred as the club expanded from 40 to 70 health clubs between 2010 and 2015.
Under terms of the agreement, In Shape will forgive over $22 million in member debt in collections, pay nearly $1.5 to members who suffered financial harm from cancellation refusals and unauthorized charges, and make payments to a fund to prevent future abuses. In Shape will also reverse any negative credit reports to credit reporting agencies.
Any member who signed a contract before February 2016 will be permitted to immediately cancel their membership without penalty.
For general questions about the settlement, consumers can call In-Shape at (209) 938-1777.