For millions of LA Fitness customers, canceling a gym membership was harder than breaking a sweat. Now the FTC is suing the company, alleging its policies deliberately frustrated consumers and violated federal law — and sending a clear warning to subscription businesses: complex cancellation flows can trigger enforcement, reputational harm, and costly refunds.

The lawsuit, filed August 20 in the Central District of California, details how LA Fitness and related gym brands—including Esporta Fitness, City Sports Club, and Club Studio—allegedly trapped more than 3.7 million members nationwide in recurring memberships that could only be canceled through unfair and opaque methods.

Key allegations include:

• Restrictive In-Person Cancellations: Members were told to log into an underused website, print a cancellation form, and deliver it in person to a single “Operations Manager” during weekday business hours—even though gyms were open up to 19 hours a day.

• Cumbersome Mail Option: Consumers could mail cancellation requests, but only by downloading the same web form and, per company guidance, sending it by certified or registered mail—adding cost and effort.

• Opaque and Contradictory Disclosures: Cancellation instructions differed between sign-up, agreements, and websites, leaving consumers confused.

• Add-On Traps: Optional services like towel service or childcare were bundled as if inseparable from base memberships, even though they could technically be canceled independently.

• Escalation Blocked: Phone or email cancellation requests—even after failed attempts—were refused via scripted responses.

• Bank & Card Rebilling: Consumers who tried to block charges at their bank reported being rebilled under new account numbers.

The FTC alleges these practices illegally generated “hundreds of millions” in unwanted fees.

INSIDER TAKE

This case underscores that the FTC doesn’t need the Click-to-Cancel rule (vacated earlier this year) to bring cancellation cases. Regulators are leaning on Section 5 of the FTC Act and ROSCA, which already give them broad authority to challenge complex “negative option” practices.

For subscription businesses, the lessons are clear:

• Cancellations must be simple—at least as easy as sign-up.

• Bundled services need clear separation so customers can cancel add-ons without canceling the core membership.

• Obscure or contradictory terms invite enforcement.

• Aggressive rebilling tactics create major liability.

The FTC says it received tens of thousands of complaints about LA Fitness’s practices. Companies that ignore that level of consumer feedback risk enforcement, reputational damage, and costly restitution orders.

With new rulemaking stalled in court, expect the Commission to double down on cases like this — using existing statutes to send a clear message: friction-filled retention tactics are a legal risk, not a growth strategy.