24 Hour Fitness Reaches $1.5M Renewal Fee Class Action Settlement

24 Hour Fitness USA Inc. has reportedly agreed to settle a consolidated class action lawsuit accusing the fitness club of increasing gym membership fees despite promising consumers that the annual renewal rate for “lifetime memberships” would remain the same for a lifetime.

Plaintiffs Kevin O’Shea, Mark Vitcov and Rod Morris filed the first 24 Hour Fitness class action lawsuit on April 1, 2016. Plaintiff Russell Marchewka filed a similar membership fee class action lawsuit against the fitness club on April 29, 2016.

The plaintiffs allege 24 Hour Fitness promised them that, if they purchased a prepaid membership, their annual renewal amount would remain fixed as long as they remained members in good standing.

They claim that these representations were made to prospective members in 24 Hour Fitness’ advertising and marketing materials. However, the plaintiffs say that their contracts did not guarantee that the annual renewal amounts would be fixed.

According to the 24 Hour Fitness class action lawsuit, the following contract terms were buried in fine print: “The initial renewal amount … is for the first 12 month renewal term only immediately following the expiration of your prepaid term” and “24 Hour … may increase all subsequent renewal amounts….”

The plaintiffs assert that 24 Hour Fitness began increasing the annual renewal amounts for certain members in June 2015.

24 Hour Fitness disputes the plaintiffs’ argument that this information was buried in fine print because it was located on the first page of the membership agreement under the bold heading: “Prepaid Initial Annual Renewal Amount (Optional Renewal).” The fitness club maintains that its membership fee increases were appropriate.

The two 24 Hour Fitness class action lawsuits were consolidated on June 28, 2016 and captioned In re: 24 Hour Fitness Prepaid Memberships Litigation.

24 Hour Fitness filed a bid to dismiss the membership fee class action lawsuit, and a federal judge granted the motion on Sept. 1. The plaintiffs subsequently filed an amended complaint and the parties engaged in mediation.

24 Hour Fitness denies the allegations but agreed to pay $1.5 million to settle the renewal fee class action lawsuit and avoid the burden and expense of ongoing litigation.

Class Members of the proposed 24 Hour Fitness settlement include anyone who enrolled in a 24 Hour Fitness membership agreement marketed or sold after April 1, 2006 which allows the member to prepay between one and three years of dues and renew annually for an annual renewal amount, and who maintained the prepaid membership on or after April 1, 2015.

Under the terms of the proposed 24 Hour Fitness settlement, Class Members are eligible to claim a refund of the extra fees they paid. They will also have the opportunity to keep their membership fees fixed for life as long as they remain in good standing. Members who do not file a claim will have their membership fees capped and will automatically receive a 10 percent refund on fees they already paid.

Top Class Actions will post updates to this 24 Hour Fitness class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The plaintiffs are represented by Edelson PC, Finkelstein Thompson LLP, Chimicles & Tikellis LLP, and Tycko & Zavareei LLP.

The 24 Hour Fitness Membership Renewal Fee Class Action Lawsuit is In re: 24 Hour Fitness Prepaid Memberships Litigation, Case No. 4:16-cv-01668, in the U.S. District Court for the Northern District of California.

UPDATE: January 2018, the 24 Hour Fitness prepaid membership class action settlement is now open. Click here to file a claim.