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Division of Consumer Affairs
Press Release

Attorney General
Anne Milgram
Division of Consumer Affairs, Director
David Szuchman
   
For Immediate Release:
January 6, 2009 
For Further Information Contact:
Jeff Lamm, 973-504-6327
 
Closed Hoboken Health Club Agrees to
Reimburse Consumers for Paid Memberships

NEWARK - Consumers who bought memberships in a Hoboken health club that closed in September will be able to file claims for refunds, under terms of a Consent Order between the Division of the Consumer Affairs and the owners of the health club.

Empire Fitness of Hoboken, formerly located at 605 Washington Street in Hoboken, operated without being registered with the Division of Consumer Affairs as legally required.

"This is an important consent order which helps customers of a now shuttered health club,'' Attorney General Anne Milgram said. "But it is also an important reminder that consumers should always check with the Division of Consumers Affairs before joining a private gym and they should read proposed contracts carefully before signing on the dotted line There should be specific provisions protecting consumers in the event the club shuts down."

“The post-holiday period is a time when consumers typically join health clubs,” said David Szuchman, Consumer Affairs Director. “Before they work out, consumers need to do their homework and make sure the health club they are thinking of joining is registered with the Division of Consumer Affairs.”

Registration requirements include the posting of a surety bond, which is an asset that is available for consumer refunds in the event a health club closes or goes out of business. Surety bonds are required when membership contracts longer than three months are sold to consumers. Contracts between the health club and consumers also must contain specific language informing consumers of their rights.

T.J.B., Inc., which did business as Empire Fitness of Hoboken, and Lucille Caputo, the owner of the health club, agreed to provide the Division of Consumer Affairs with the club's membership list and other records to identify the consumers entitled to refunds. The Division will inform each consumer of his/her right to file a claim for a refund and then review all submitted claims.

T.J.B., Inc., and Caputo also agreed to pay the Division $10,000 in civil penalties, $667 as reimbursement for its investigative costs and $405 as reimbursement for its legal fees. They also agreed to comply with the state's Consumer Fraud Act, Health Club Provisions and Health Club Regulations in any future operation of a health club.

Szuchman noted that consumers can check whether a health club is registered by contacting the Division's Regulated Business Section at 973-504-6261. Consumers also can ask health club representatives to see the facility's state-issued registration document.

Health club operators are required to:

Issue written contracts and provide a copy of the executed contract to the consumer;

List the consumer's total payment obligation on the first page of the contract;

Include a 'Notice to Customer' within the contract informing the consumer of his/her right to cancel the contract within three days after receiving a copy of the contract;

Extend the contract for a period equal to a 30-day or longer closure of the health club or provide a prorated refund to the consumer; and

Allow cancellation of the contract by the consumer and provide a prorated refund if the consumer moves more than 25 miles from the health club or an affiliated health club offering the same or similar services, at no additional expense to the consumer.

To file a complaint, contact the Division via its web site, http://www.nj.gov/oag/ca/ocp/ocpform.htm or call 1-800-242-5846 (toll-free within N.J.) or 973-504-6200.

Deputy Attorney General Jah-Juin Ho represented the state in this matter.

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