24 Hour Fitness Settles Class Action Lawsuit for $295 Million

November 23 2010

Los Angeles, CA: A lawsuit that commenced on October 2, 2006 alleged that 24 Hour Fitness, the nation's largest privately owned fitness center chain, violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), the Electronic Fund Transfer Act ("EFTA"), and engaged in unfair and fraudulent business practices, as well as other violations of California's consumer protection statutes in charging monthly membership dues by unauthorized electronic funds transfer ("EFT") after members provided notice of cancellation of their memberships.

After 4 years of hard fought litigation, United States District Court Judge A. Howard Matz approved a class action settlement agreement that provided a $20 monetary reimbursement or a 3-month all-access membership certificate, valued between $150-$200, to just over 1.53 million class members nationwide. In Friedman v. 24 Hour Fitness, plaintiffs alleged fees had been deducted from their bank or credit card accounts after giving 24 Hour Fitness notice that they were cancelling their gym memberships.

Following protracted settlement negotiations, both sides entered into a settlement agreement that provided valuable benefits to the settlement class and puts a complete stop to the practice going forward. The settlement is valued at over $295 million.

Regarding the settlement, 24 Hour Fitness states that: "24 Hour Fitness values its members and we strive to offer the best fitness experience in the industry. We are responsive to our members' concerns and we have settled this case so we can continue to focus on our overall goal of helping people make fitness a way of life."

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