In-Shape customers get notification of potential refund

UPDATE 9/15/2016 9 PM: One month ago, the Monterey County District Attorney’s Office announced a multi-million dollar settlement with a Stockton-based health club that operates facilities all over California. On Thursday, KION checked back in with prosecutors, who filed the claim saying the business participated in unfair business practices. They say certain In-Shape Health Club members could be eligible for restitution.

The investigation began in 2014 after prosecutors in Monterey and Kern Counties began receiving more complaints about the company. Many of the complaints involved members who tried to cancel their memberships.

“They were led to believe, by employers of the gym, that their cancellation requests would be submitted and processed and they would walk away thinking they cancelled their membership, only to find five to six months later that they were continuing to get billed on their credit card, or in some cases, they were sent to collections,” Deputy District Attorney John Hubanks said.

Hubanks also says other complaints include membership promotions and unauthorized billings.

According to a press release from the D.A.’s Office, terms of the settlement include In-Shape not admitting to any wrongdoing. They also agreed to pay as $1.4 million to members who suffered financial harm from cancellation refusals and unauthorized charges, $22 million debt forgiveness, reversal for any negative credit rating and members who signed a contract before February 2016 will be allowed to cancel their membership without penalty.

Potential victims will be notified soon. Hubanks estimates thousands of people could be eligible for restitution.

“These people will receive email notices, probably in the next two or three weeks, advising them of their right to submit a claim,” Hubanks said. “These people were identified by a data analytics company that we hired and went through In-Shape’s membership records.”

If members can’t be reached by email, In-Shape will mail them a notice. Members then have a certain amount of time to respond to the claim.

Since the judgement was announced, about ten people have reached out to the Monterey, Santa Cruz and Kern County District Attorney’s Offices for help. Some victims reportedly said they could not get a hold of In-Shape. KION repeatedly tried calling the hotline number given by authorities, but would only get a busy signal.

Hubanks said concerned consumers can contact them to get a hold of In-Shape’s attorneys.

Dozens of people commented on KION’s original story in August, telling us stories of how they believed they were scammed. One user claimed money was taken out of her bank when she thought her membership had expired, another found suspicious charges on her statement and a third said, “In-Shape lied, cheated me out of my money and so much more.”

Hubanks offers these tips for people thinking about joining a health club:
-Get a copy of the contract that details monthly charges and terms of the contract
-Beware of contracts that last into the indefinite future
-Learn cancellation procedures

On Thursday, KION reached out to In-Shape’s corporate offices in Stockton, but was unsuccessful.

However, on Friday KION got a call back and was given this 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.

Paul Rothbard, CEO of In-Shape Health Clubs

In-Shape Health Clubs said customers with questions should send an email to settlement@inshape.com.

ORIGINAL POST: In-Shape Health Club members, who were impacted by unfair business practices from March 2010 to August 2015, are in the process of finding out if they’ll get a refund.

On Thursday, the Monterey County District Attorney’s Office explained customers are being notified if they were affected by misleading promotional terms, refusal to have their account canceled, unauthorized billing or invalid debt collection.

In August, the company agreed to settle those allegations by paying out more than $23 million in restitution.

In-Shape Health Clubs said customers with questions should send an email to settlement@inshape.com.