Business
The former CEO has been ordered to pay up after charging members when the gyms were closed in April 2020.
The former CEO of Boston Sports Club’s parent company has been ordered to pay $3.85 million in restitution after charging members for services that could not be provided in April 2020 due to the pandemic, officials announced last week.
The state Attorney General’s Office had sued Patrick Walsh, the former CEO of Town Sports International, and the Suffolk County Superior Court ruled in the office’s favor on all counts after a multiweek trial, according to a release.
“The Court found that Walsh unfairly charged members in April 2020 for services he knew would not be provided, made deceptive statements to BSC members, and violated the Health Club Act by thwarting BSC members’ ability to cancel their memberships and failing to honor cancellation requests,” the AG’s Office said.
The company had been a defendant in the lawsuit but was left out of the judgment because it had filed for bankruptcy, the release noted.
Before the April billing, the sports club reportedly told members, with Walsh’s approval, that they would receive credits to their accounts when the gyms reopened, but customers did not receive the credits in July 2020 “unless they personally complained,” according to the AG’s Office.
In terms of canceling memberships, the Attorney General’s Office said it had received over 2,000 complaints from members who were unable to cancel their contracts around that time to avoid paying for services they could not access during the closures.
“Consumers reported and testified at trial that they called, emailed, and sent social media messages to BSC in an effort to cancel their contracts, all without receiving a satisfactory response,” the release says. “Consumers also testified that BSC continued to charge them for memberships, even after they had submitted cancellation requests.”
Once the nearly $4 million payment is made by Walsh, the AG’s Office will work to distribute the restitution funds to the impacted members. “Individuals do not need to contact the AGO at this time to receive payment,” the office noted.
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