BILL NUMBER: S9067

SPONSOR: PERSAUD
 
TITLE OF BILL:

An act to amend the general business law, in relation to the cancella-
tion of a health club contract

 
PURPOSE OR GENERAL IDEA OF BILL:

Requires that health club contracts and memberships need not exceed 24
hours in immediate cancellation at the buyer's request and can be
canceled online.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 624 of the general business law is amended by adding a new
subdivision 4 to read as follows:  every contract for services shall
provide that such health club shall accept cancellation of membership by
the buyer or the buyer's estate within twenty-four hours of receiving
notice of the cancellation
              

 
JUSTIFICATION:

This legislation mandates health clubs' membership cancelation to be
effective within the first 24hrs. According to the International Health,
Racquet & Sportsclub Association, there are 2,111 health clubs in New
York. On average, 4,383,454 constituents in New York use the health club
facilities available. In observance of the New York Health Club Services
Act, all health club contracts are cancelable within three days of the
signing of the contract, and at any time for any of the following
reasons: if the health club ceases to offer the services stated in the
contract; if the consumer moves 25 miles from any health club operated
by the seller; and if upon a doctor's order, the consumer cannot receive
the services as stated in the contract because of significant physical
disability for a period in excess of six months. Such notices must
appear on all health club contracts.

The health club must provide refunds within 15 days of such cancella-
tion. Clubs are exempted from this requirement if they do not offer
pre-paid memberships if payments do not exceed $150, memberships do not
exceed one year, and the contract does not contain an automatic renewal
provision. Yet, buyers of health club memberships are still required to
pay fees throughout the remainder of a contract year despite wanting
immediate cancellation.

To add, many of the cancelation processes for health clubs involve
in-person meetings to cancel memberships. New York's Health Club Law
authorizes gym members to cancel their membership under certain circum-
stances, including after the services are no longer available or
substantially available as provided in the contract because of the gym's
permanent discontinuance of operation or substantial change in operation
and require gym owners to offer prorated refunds for such cancellations
within 15 days. This bill will allow buyers to feel unrestricted by
health club contracts' circumstantial terms and given a chance to
discontinue their services online instead of strictly in person.

 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.