The promise to cancel a contract should be just as promising as finding love online. Many online dating services require customers to sign a contract, pay monthly fees, enroll in automatic payment, and register for a membership plan that lasts anywhere from a couple months to a year...
Prepaid Entertainment Contracts
Laws protect consumers who sign and agree to prepaid entertainment contracts. Examples of prepaid entertainment contracts are gym memberships, dance studios, dating services, massage companies and spas, martial arts facilities, sports clubs, weight reduction centers, and other services requiring monthly payments.
Prepaid entertainment contracts have to be in writing and signed by the consumer and the servicer before the contract begins. The contract has to be under three years and the consumer cannot be charged more than ten percent of the total contract before the services are made available. Servicers must tell consumers orally about a right to cancel the contract and must provide two printed copies of the cancellation rights along with the agreement at the signing.
Every consumer is eligible for a three day right to cancel after signing. A disclosure in bold print should verify all rights to cancel the contract. A consumer disability also justifies the right to cancel and relocation of the company facility more than 25 miles away from a previous location is also reasonable cause to cancel. It is also illegal for a company to waive the right of the consumer to cancel in the contract. Every consumer has the right to cancel.
The company cannot deny a cancellation and must stop charging a consumer after canceling. A company failing to provide a consumer with the rights to cancel in the agreement at signing can allow a consumer to cancel at any time, even years after the contract began. A consumer lawyer can provide assistance to consumers dealing with companies not following the law and struggling with canceling a membership. Consumers who sign contracts before a facility opens are protected by additional rights.
Door to Door Solicitations
A company selling goods or services to a consumer outside the company’s regular place of business and inside a buyer’s home is considered a home solicitation sale. In Ohio, there are laws to protect consumers involved in these types of business transactions which could result in damages for buyers and penalties for a company if it fails to comply. These laws include details about information the consumer must be provided with, the right to canceling a purchase and misrepresentation.
A company must provide their business’s name and address when contracting a sale solicited in a consumers home. The contract must also include information regarding the language used to make the sale and provide a copy of the contract to the buyer. This contract should include the buyers signature, the date the agreement was made and two copies of the notice of the buyer’s right to cancel the purchase. In Ohio specifically, the buyer is granted a three day right to cancel. The seller must orally notify the buyer of their right to cancel a purchase and refund all payments within 10 business days of cancellation. Also, services may be withheld until after the cooling off period has expired.
Misrepresenting the goods or services being sold by the seller is also an important concept of the buyer’s rights. The seller must make it clear that their intention is to make a sale. There cannot give any false or misleading information including that the buyer has been specially selected to receive a bargain, won a contest, or that the product cannot be sold in stores. Declaring there is no right to cancel is also an illegal and they cannot take on the authority to negotiate the final terms of the sale.
Doucet & Associates Co. L.P.A. in Ohio helps enforce rights regarding home solicitation sales. Please contact us today if you or someone you know needs help.
LA Fitness Loses PECA Lawsuit
An LA Fitness in Columbus lost a lawsuit to Doucet & Associates this year. The lawsuit alleged that our client was tricked into signing contracts for services that she had no intention of using and would cost her almost nine times as much as she intended to pay. There were numerous violations of the Prepaid Entertainment Contract Act (PECA) concerning LA Fitness’ conduct in this case, and a judgement was taken against LA Fitness after it failed to appear at trial.
In early February, our client signed a contract with LA Fitness for five personal training sessions. The deal, as she understood it, was for her to pay for four personal training sessions and get the fifth one free. However, the contract she signed locked her into a year’s worth of training sessions and renewed automatically each year. Similarly, the contract she signed for access to the gym had the same expanded language.
PECA requires that contracts do not exceed three years in length, arguably making these contracts indefinite. Our client was never informed of her right to cancellation, which was also a clear violation of PECA. Finally, our client was never given a copy of the contracts she signed, resulting in the final violation of the Ohio law.
Thanks to Doucet & Associates Co LPA, our client ultimately won the case, resulting in a complete refund to our client, damages, plus attorney fees and costs. Our law firm often works with cases concerning PECA, which applies to a variety of entertainment contracts including, martial arts facilities, dating services, dance studios, spas and gyms. If you feel that you signed an entertainment contract that was not what you were led to believe, call Doucet & Associates at (614) 944-5219.
Gym Fails to Cancel Membership; Loses Appeal
That gym membership contract does not have as much muscle as you think, according to a recent decision by The Court of Appeals of Ohio, Second Appellate District. If the gym has not followed PECA (Prepaid Entertainment Contract Act) precisely, then the customer can cancel a predatory, overpriced membership and receive a refund of everything paid – plus damages and reasonable attorney fees.
In a recent case filed in Montgomery County, our client sued Everybody Fitness, LLC in Dayton, Ohio for charging a $100.00 enrollment fee (twice the legal limit), payable before he and his wife could use the facility. In addition, the gym charged the couple $48.10 per month, deducted from the plaintiff’s credit card before receiving services, and an annual fee of $41.73. The gym promised that Zumba classes would be available. When the gym failed to offer the classes, the couple decided to cancel their 36-month family membership and requested a refund of all money paid under the contract minus $10.00. Because the contract was a prepaid entertainment contract, cancellation and a refund of was an option.
As part of our client’s cancellation, he requested a copy of his contract, the return of any evidence of indebtedness, and notice of whether the gym would return or keep evidence of indebtedness. But, he did not receive any of these documents. Everybody Fitness failed to provide a Notice of Cancellation within the time frame necessary to comply with PECA requirements, did not provide an address to which our client could deliver the document, and illegally produced a notice with type smaller than 10 point. The trial court determined that the gym did knowingly perform these violations and found for our client on summary judgments.
Everybody Fitness appealed the decision and unsuccessfully argued at the court of appeals that our client’s requests were more than what PECA required. The court agreed with our client and the earlier court’s decision in part, but also reversed the earlier awarding of damages for mental anguish and stress.
Our client paid $911.33 in membership fees over the course of his contract with Everybody Fitness, which the court ordered refunded to him. He is also entitled to statutory double damages for a total award of $1,802.66. The court also awarded our law firm attorney’s fees, which will be determined at the conclusion of the case.
To schedule an appointment for help in membership cancellation, call the consumer protection lawyers at Doucet & Associates at (614) 944-5219.
South Beach Fitness LLC Closes Location in Gahanna, OH
South Beach Fitness, LLC in Gahanna, Ohio closed that location in late September, 2013 to the surprise of many people. On the entrance door, it welcomed its members to visit its facility several miles away in Reynoldsburg. Unfortunately, some members recently signed up for services in Gahanna and expected to receive services at the Gahanna gym, especially after paying hundreds of dollars in enrollment and administrative fees. Questions remain about when the gym ownership knew about the move and why they chose to accept new membership fees with a pending move on the horizon.
Our firm is looking to help people who would like a refund of the money they paid to South Beach Fitness, LLC. The membership contract we reviewed appears to violate Ohio law, which likely entitles consumers to a refund of money paid, some damages, plus the payment of our attorneys’ fees for assisting in the matter.
If you would like to discuss how Doucet & Associates Co., L.P.A. can help you cancel your contract with no out of pocket attorney costs, please call us today at (614) 944-5219.
Wells Fargo Admits to Wrongful Conduct in Mortgage
Wells Fargo, a multinational banking and financial services holding company, admitted wrongdoing by proffering judgment in a federal lawsuit filed by Doucet & Associates on behalf of its client, a Westerville homeowner. Wells Fargo confessed to the lawsuit’s allegations and paid the homeowner money for the wrongful conduct.
In 2009, the homeowner accepted a promissory note and a mortgage in order to create a security interest in his home. During this time Landstar Title, LLC, APR Mortgage Corporation, Century Mortgage Company of Kentucky, and Prominent Title Agency, LLC, allegedly improperly set up an affiliate relationship (sharing profits from the real estate settlement). The homeowner alleged they did not properly inform the homeowner of this profit sharing, meaning he alleged all monies that changed hands were illegal kickbacks.
Later in 2012, the homeowner informed Wells Fargo that he wished to cancel his mortgage loan transaction under the Truth in Lending Act (TILA) on the basis of the non-disclosure of payments between the title company and mortgage company. Wells Fargo failed to honor this request, and in doing so violated the Truth in Lending Act.
The homeowner sought the cancellation of his mortgage loan be honored and that the security interest on his property be terminated. He also sought actual, statutory, and punitive damages in addition to injunctive relief to ensure these actions would not happen again, and wished to ensure these dealings did not affect his credit score.
Wells Fargo, in response, admitted wrongdoing and offered the homeowner cash in damages, which he accepted.
Doucet & Associates is dedicated to fighting for the rights of consumers, protecting their interests and offering legal assistance to those who would otherwise be unable to afford it. If you feel that a company is taking advantage of you, the law firm welcomes your call at (614) 944-5219.