Outcome: $1,500,000.00 Settlement
In re 24 Hour Fitness Prepaid Memberships Litigation, Case No.: 4:16-cv-01668-JSW in the United States District Court for the Northern District of California
24 Hour Fitness must pay out $1.5 million to class action members as redress for alleged rate discrepancies. The settlement resolves allegations that the health club company failed to uphold promises regarding fixed membership rates. Club members allegedly agreed to a rate for life when in fact they agreed to a membership rate with annual increases and were not informed of this fact. The dispute stems from 24 Hour Fitness’s implementation of a new annual rate-increase policy in 2006 and subsequent assurances by some employees that membership rates would not change. After rate increases took effect in 2015, many members felt misled, catalyzing the initial complaint filed in July 2016.
This settlement concludes the legal dispute that claimed the company engaged in deceptive practices by not adhering to its original contractual promises. The parties reached a resolution that alleviates potential further litigation costs and addresses member grievances regarding unexpectedly increased rates for prepaid membership services. Tycko & Zavareei LLP was appointed Settlement Class Counsel along with several consumer protection law firms. The class includes all persons in the United States enrolled in a 24 Hour Fitness Prepaid Membership as of April 2015, per the company’s records.
The agreement underscores the importance of clarity in membership contracts and the expectations set by company representatives. It serves as a pivotal reminder to businesses to maintain transparency in their practices and communications with customers. For the affected 24 Hour Fitness members, the settlement offers a measure of compensation for the incongruencies between the services promised and the services provided.