Legal woes for Peak Fitness Clubs continued yesterday as a Superior Court judge ordered Peak Fitness Clubs to change their illegal and deceptive operating practices in response to hundreds of consumer complaints.

The North Carolina State Attorney General’s Office negotiated a comprehensive agreement with Peak Fitness Clubs, and Judge Howard Manning approved the consent judgment Thursday.

“Many people are making New Year’s resolutions to lose weight or get in shape by joining a gym,” Attorney General Roy Cooper said in a statement. “We want to make sure that people get what they pay for and that health clubs treat their members fairly.”

Cooper said his office has received about 300 complaints regarding Peak Fitness Clubs over the past five years.

Under the agreement, Peak Fitness Clubs and its owners will change customer service, contracts and billing practices at all 28 of its health clubs across North Carolina. The company also will reimburse the Attorney General’s Office $30,000 for consumer education and investigative costs.

The changes include the following:

• A single point of contact will handle all consumer complaints, concerns and questions, and contact information will be clearly posted in all Peak Fitness Clubs clubs, on all Peak Fitness Club Web sites and on all customers’ contracts.
• Contact information for Peak Fitness Club’s billing company, ABC Financial, will be clearly posted in all Peak Fitness Clubs, on all Peak Fitness Club Web sites and on all customers’ contracts, and a working fax machine will be provided in all Peak Fitness clubs for cancellations and correspondence with Peak Fitness Club.
• Appropriate bonds will be purchased and maintained for each health club the company operates in North Carolina. Bonds can be used to pay refunds to members if the club shuts down.
• Memberships to any Peak Fitness Club cannot be sold more than 180 days before the gym will open.
• The Attorney General’s Office will be notified before the Peak Fitness Club enters membership contracts for clubs that have yet to open, and the company will purchase a bond of at least $10,000 for the club and give consumers written notice of their extended three-day right to cancel their contracts.
• Peak Fitness Club will give advance notice to gym members and the Attorney General’s Office when a health club will be closed or when members will be transferred to another location.
• Pro-rated refunds will be given to any customer who purchases or renews a membership to a club that then closes within 90 days.
• All membership contracts will include a specific time period for the membership measured in years or parts of a year, contain a full statement of consumers’ right to cancel the contract within three days of signing it and contain a full statement of their right to refunds.
• Peak Fitness Club must clearly explain that automatic renewal of memberships is optional.
• Pro-rated refunds will be paid when members move more than eight miles from the club or more than 30 miles from any Peak Fitness Club location or are no longer able to use the facilities because of death or disability.
• Peak Fitness Club must honor lifetime contracts purchased prior to 1980 at health clubs now owned by Peak Fitness Club. Consumers who allowed their lifetime contract to lapse or otherwise entered a replacement contract with Peak in 2008 have 60 days to contact Peak to get their lifetime contract reinstated.

The comprehensive judgment also prevents Peak Fitness Club from making anymore false or misleading statements to consumers, such as telling members that they can cancel their contracts at any time, that a club will not close or that a new club will open.

“Over the past few years, we’ve been able to recover more than $1 million for hundreds of North Carolinians who were members of health clubs, gyms or dating clubs that shut their doors,” Cooper said. “If your health club closes down unexpectedly, let us know about it.”

Some Knightdale customers of Peak Fitness Club might also be eligible for refunds, he said. People who purchased memberships at Peak Fitness Club Knightdale before the club opened and didn’t get a refund as requested can apply to get their money back by contacting the company by e-mail through the PeakFitnessClubs.com Web site or by fax at 704-896-5741.

Additonal stories about Peak Fitness Clubs legal problems:

• Peak Fitness, Attorney General Reach Agreement Over Complaints (MSNBC)
• North Carolina Attorney General Settles with Peak Fitness Clubs (ABC-11)
• Attorney General Wins Reforms, Refunds From Peak Fitness Clubs (Statesville Landmark & Record)
• Peak Fitness Clubs Settles Attorney General’s Lawsuit (Winston Salem Journal)
• Peak Fitness settles suit, agrees to make changes (News & Observer)
• Peak Fitness Settles Suit and Agrees to Make Changes (Charlotte Observer)
• AG’s office reaches agreement with Peak Fitness (News & Record)
• Peak Fitness to change tactics, offer refunds (Triangle Business Journal)
• NC attorney general spanks Asheville’s Peak Fitness (Ashvegas)
• Peak Fitness To Change Ways Under New Agreement With NC Attorney General (NBC-17)
• Peak Fitness may owe some members money (WWAY – TV3)