Abrupt Curves Closures Lead to Consumer Refunds

curves closuresCurves International health clubs charged membership fees, then suddenly shut their doors – some without providing refunds to consumers reeling from the unexpected closures.

Consumers in 27 New York counties will now get their money back as part of a settlement Curves International has signed with the New York Attorney General's Office, where about 60 locations shut down in 2009.

Some 1,000 Curves closed nationwide in 2009."If you do business in New York, then you have to play by the rules. Curves International -- like any franchiser operating in the state -- must refund the customers who prepaid for memberships they ultimately could not use," Attorney General Eric T. Schneiderman said in a statement. "My office will continue to ensure that consumers are treated fairly, and I encourage New Yorkers to learn their rights and report offenses to our office so that we can take action."

Curves International didn't honor its obligation to provide refunds when independently owned Curves Health Clubs franchises went out of business, Schneiderman said.

Curves International will establish a restitution fund for the consumers who requested a membership refund from any Curves club that closed in 2009. Curves will pay up to $100,000 into a reimbursement fund, which the Better Business Bureau will manage. In addition, it will pay $60,000 to New York state for the investigation costs.

Curves International sent the following statement from company President Mike Raymond to Consumer Ally:

"When it was brought to our attention by the Attorney General's Office that certain of our independently-owned franchisees were not treating members in the same spirit of fairness we pride ourselves on, we took all necessary steps to ensure that such was corrected. We look forward to working with the Attorney General to prevent our members from being harmed by any rogue franchisees in the future and helping all of our members on their path to health and wellness."

The Attorney General's Office launched an investigation following complaints that a Suffolk County Curves franchise had closed without notice. Since that club failed to secure a bond as was required by law and refused to provide refunds to its members, consumers sought refunds from Curves International -- its franchiser. However, Curves International failed to immediately provide refunds, denying any responsibility for the independently owned club, the agency said.

Under New York law, any contract between a consumer and a franchised health club is also enforceable against the franchiser. Curves International refused to honor that legal obligation and failed to provide refunds to the consumers, Schneiderman said.

New York consumers who think they're entitled to a refund from Curves International should call the Better Business Bureau at 212-358-2857 or write to 30 East 33rd St., 12th Floor, New York, NY 10016.

Problems with gym memberships are a common consumer issue, said Schneiderman.

When selecting a gym, consumers should compare prices and ask about the amount of dues, hours of operations and other amenities. High-pressure sales tactics are a "red flag" and should be reported to the Attorney General's Office.

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