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A putative class action lawsuit was filed Thursday against a New York gym operator because it is allegedly continuing to charge its members monthly fees, even though its gyms are closed because of the coronavirus shutdown.
Although all gyms operated by New York-based Town Sports International LLC are closed, the company “is outrageously continuing to charge members their monthly membership dues, which are paid for one purpose and one purpose only,” to access the firm’s New York Sports Clubs gyms, said the lawsuit filed in New York District Court in New York in Mary Namorato v. Town Sports International LLC, and Town Sports International Holdings Inc. d/b/a/ New York Sports Clubs.
The lawsuit said numerous other gym chains “on their own accord” have suspended membership charges during this period, but TSI has not “and the conduct is the height of corporate greed, lack of empathy and putting profits before people,” said the lawsuit.
It said according to its annual Securities and Exchange Commission report for 2019, the company has 605,000 members paying monthly membership dues ranging from $30 to $120.
It said also the company has made it “virtually impossible for members to cancel their membership and has refused to honor many members’ cancellation requests.”
The lawsuit, which charges breach of contract, seeks damages including membership dues.
Plaintiff attorney David E. Gottlieb, a partner at Wigdor LLP in New York, said in a statement, “TSI must do right by New Yorkers who are at the epicenter of this global crisis by freezing all gym memberships effective immediately, honoring all written or verbal membership cancellation requests, and issuing refunds to those members who were fraudulently charged fees for gym memberships that they are now unable to use.”
The statement also calls on the New York State Attorney General’s office and the New York City Department of Consumer Affairs to act against the company.
The company did not respond to a request for comment.
More insurance and risk management news on the coronavirus crisis here.
The coronavirus pandemic began causing major disruption worldwide last month as many governments imposed severe restrictions and businesses overhauled their operations in reaction to the crisis. As organizations respond to the challenges arising from COVID-19 and efforts to stem the spread of the disease, numerous risk management issues arise ranging from coverage for lost revenue to liability exposures and worker safety.