Prepaid money cards now have similar protections regarding fraudulent and unauthorized charges as debit and credit cards...
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.
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.