NY State Senate Bill 2021-S303

Senate Bill S303

2021-2022 Legislative Session

Relates to the cancellation of a health club contract

download bill text pdf

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to consumer protection
Jan 06, 2021	referred to consumer protection

2021-S303 (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §624, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7683
2023-2024: S530

2021-S303 (ACTIVE) - Summary

Requires health club contracts to allow a buyer to cancel with thirty days' notice; allows a buyer to submit a notice of cancellation by electronic mail in addition to in person, by phone or by mail; requires a health club to accept notice of cancellation via website if such contract was entered into via website; decreases the time necessary for a disability cancellation from six months to three months.

2021-S303 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S303

SPONSOR: THOMAS
 
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:

This legislation simplifies the process of cancelling a gym membership
and ensures customers who chose to cancel are able to do so without
excessive restrictions.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends section 624 of the general business law by
amending subdivisions 2, 3, and 4:  Subdivision 2 of section 624
requires that a health club provides any refund that is owed to a
consumer within 48 hours of receiving that consumer's notice of cancel-
lation.

Subdivision 3 of section 624 requires that a health club permits a
consumer to cancel their contract with a 30-day notice for any reason.
Subdivision 3 also states that a consumer can cancel their health club
contracts when they have moved more than 25 miles away from the facility
when they are physically incapable of working out for three months or
longer per a doctor's order, or if services promised under the original
contract cease to exist. A health club is prohibited from charging a
cancellation fee that is more than the equivalent of one monthly
payment.  Subdivision 4 of section 624 allows a consumer to submit a
notice of cancellation to a health club by electronic mail in addition
to in-person, by phone, or by mail. It also requires health clubs to
accept a notice of cancellation through their website if such a contract
was made through that medium

Section 2 sets forth the effective date.

 
JUSTIFICATION:

When it was revealed that Stephen Ross, developer and an executive of
Equinox Fitness and SoulCycle, was hosting a fundraiser for Donald
Trump, hundreds of people attempted to cancel their memberships only to
find that it was a costly and onerous process. Gyms and health clubs
around the state often lock members into a contract for at least one
year, with limited acceptable reasons to cancel such a contract. They
will often require that cancellations be done in person and charge hefty
cancellation fees.

Current law allows consumers to cancel a gym membership when they have
moved more than 25 miles away from the gym, when they are physically
incapable of working out for six months or longer, or if services prom-
ised under the original agreement cease to exist. Even within these
guidelines, gyms have made it increasingly difficult and expensive for
consumers to cancel. Gyms and health clubs, which have made signing up
such a simple process that it can be done in minutes online, have an
obligation to consumers to make cancelling a membership just as easy.


This legislation will require gyms and health clubs to allow members to
cancel for any reason with 30-days notice and it will require that these
facilities allow for cancellations to be made online. Further, this
legislation will allow members to cancel a membership if they suffer an
injury or disability that restricts them from working out for three
months, rather than six, requires that any refunds owed to the consumer
are provided within 48 hours and limits cancellation fees to no more
than the equivalent of one monthly payment.

 
PRIOR LEGISLATIVE HISTORY:

2020: S.7683 (Thomas)/A.8860 (Rosenthal) - Referred to Consumer
Protection Committee.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately; provided that section one of
this act shall apply to contracts entered into, issued, renewed, modi-
fied, altered or amended on or after such effective date.

2021-S303 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    303
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to  the  cancella-
   tion of a health club contract

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 624 of the general business law, as added by  chap-
 ter 630 of the laws of 1978, is amended to read as follows:
   §  624.  Rights  of  cancellation of contracts for services. 1.  Every
 contract for services at a planned health club or a  health  club  under
 construction shall, at the option of the buyer, be voidable in the event
 that  the  health  club and the services to be provided pursuant to such
 contract are not available within one year from the date the contract is
 executed by the buyer.
   2. Every contract for services shall provide that such contract may be
 cancelled within three business days after the date of  receipt  by  the
 buyer  of  a copy of the written contract. [Notice of cancellation shall
 be delivered by certified  or  registered  United  States  mail  at  the
 address  specified  in  the  contract.]  Such contract shall contain the
 following written notice in at least  ten  point  bold  type:  CONSUMERS
 RIGHT  TO CANCELLATION. YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY
 OR FURTHER OBLIGATION WITHIN THREE (3) DAYS FROM THIS DATE . . . .  .  .
 [Notice  of cancellation shall be in writing subscribed by the buyer and
 mailed by registered or certified United States mail to  the  seller  at
 the  address specified in such form. Such notice shall be accompanied by
 the contract forms,] A BUYER WHO CANCELS  A  CONTRACT  PURSUANT  TO  THE
 PROVISIONS OF THIS SUBDIVISION SHALL RETURN ALL membership cards and any
 other  documents  or  evidence of membership previously delivered to the
 buyer.  All moneys paid pursuant to  such  contract  shall  be  refunded
 within  [fifteen  business  days]  FORTY-EIGHT  HOURS of receipt of such
 notice of cancellation.  If the buyer has executed any  credit  or  loan
 agreement to pay for all or part of health club services, any such nego-

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02863-01-1

 S. 303                              2
 
 tiable  instrument  executed  by the buyer shall also be returned within
 [fifteen days] FORTY-EIGHT HOURS.
   3. (A) Every contract for services shall provide that after such three
 day  period  for  cancellation  as  provided  in subdivision two of this
 section, the buyer's estate may cancel a contract for  services  if  the
 buyer  dies.  The  buyer  may  also cancel after three days if the buyer
 becomes significantly physically disabled for  a  period  in  excess  of
 [six]  THREE  months,  or  moves his OR HER residence to a location more
 than twenty-five miles from a health club operated  by  the  seller,  or
 after the services are no longer available or substantially available as
 provided  in  the  contract because of the seller's permanent discontin-
 uance of operation or substantial change in operation. Nothing contained
 herein shall restrict or prohibit the seller from offering or  providing
 in  such  contract  additional  or broader reasons for cancellation. The
 seller may require reasonable evidence for a  cancellation  pursuant  to
 this subdivision.
   (B)  EVERY  CONTRACT  FOR SERVICES SHALL PROVIDE THAT AFTER SUCH THREE
 DAY PERIOD FOR CANCELLATION AS  PROVIDED  IN  SUBDIVISION  TWO  OF  THIS
 SECTION, THE BUYER MAY CANCEL THE CONTRACT UPON THIRTY DAYS' NOTICE.
   (C)  Such  contract shall contain the following notice captioned in at
 least ten point bold type: ADDITIONAL RIGHTS TO CANCELLATION:
   You may also cancel this contract for any of the following reasons:
   If upon a doctor's order, you cannot physically receive  the  services
 because  of  significant  physical  disability for a period in excess of
 [six] THREE months.
   If you die, your estate shall be relieved of  any  further  obligation
 for payment under the contract not then due and owing.
   If you move your residence more than twenty-five miles from any health
 club operated by seller.
   If the services cease to be offered as stated in the contract.
   FOR ANY REASON UPON THIRTY DAYS' NOTICE.
   (D)  All  moneys  paid  pursuant  to  such  contract cancelled for the
 reasons contained in this subdivision shall be refunded within  [fifteen
 days]  FORTY-EIGHT  HOURS  of  receipt  of  such notice of cancellation;
 provided however that the seller may retain the  expenses  incurred  and
 the  portion  of  the  total  price  representing  the  services used or
 completed, and further provided that the seller may demand  the  reason-
 able  cost  of goods and services which the buyer has consumed or wishes
 to retain after cancellation of  the  contract.  THE  SELLER  SHALL  NOT
 DEMAND  MORE THAN ONE MONTH'S FEE OR THE EQUIVALENT THEREOF FROM A BUYER
 WHO CANCELS A CONTRACT PURSUANT TO PARAGRAPH (B) OF THIS SUBDIVISION. In
 no instance shall the seller demand more than the  full  contract  price
 from  the  buyer. If the buyer has executed any credit or loan agreement
 to pay for all or part of health  club  services,  any  such  negotiable
 instrument  executed by the buyer shall also be returned within [fifteen
 days] FORTY-EIGHT HOURS.
   4. (A) EVERY CONTRACT FOR SERVICES SHALL PROVIDE THAT SUCH HEALTH CLUB
 SHALL ACCEPT NOTICE OF CANCELLATION OF SUCH CONTRACT IN PERSON, BY MAIL,
 OVER THE PHONE OR BY ELECTRONIC MAIL.
   (B) IF A HEALTH CLUB ALLOWS A BUYER  TO  ENTER  INTO  A  CONTRACT  FOR
 SERVICES  THROUGH  A  WEBSITE, SUCH HEALTH CLUB SHALL ACCEPT A NOTICE OF
 CANCELLATION OF SUCH CONTRACT THROUGH SUCH WEBSITE IN  ADDITION  TO  THE
 METHODS PROVIDED PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION.
   § 2. This act shall take effect immediately; provided that section one
 of  this  act  shall  apply  to contracts entered into, issued, renewed,
 modified, altered, or amended on or after such effective date.

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