Midtown gym goes bankrupt, continues to bill members

Published: Nov. 13, 2017 at 8:04 PM CST|Updated: Nov. 21, 2017 at 10:28 PM CST
Email This Link
Share on Pinterest
Share on LinkedIn

MEMPHIS, TN (WMC) - Fitness 1440 is no longer fit for business. Its failure puts into perspective what Tennessee law expects of health clubs and fitness centers.

According to its owner, the gym at 2011 Union Avenue officially closed its doors September 30. Bankruptcy, said owner Joseph Schrum of Germantown, Tennessee. Except he failed to notify his 700 members, who had been registered for automatic billing. He posted a sign on the front door, saying he had suspended the billing and "you are not being charged."

Except some of them are being charged.

Gym member Tela Robinson of Raleigh was charged. Fitness 1440 automatically debited her checking account her monthly bill of $43.69 for October -- when there was no October at the gym. Other members swamped the club's now-defunct Facebook page, claiming Schrum billed them for October, too.

"I did not sign a contract," insisted Robinson. "That's one of the attractive things because a lot of times when you're signing a contract, you have the 30 days to cancel, 60 days to cancel. There's definitely a lot of by-laws with that."

Those "by-laws" are there for a reason, Ms. Robinson.

Tennessee's law on "requirements for valid agreements" (47-18-305) requires all health club and fitness center agreements to be in writing and signed by the buyer. The law prohibits gyms from allowing or imposing automatic or lifetime renewals of those agreements. It also forbids health clubs from offering free or temporary no-cost memberships as enticements to join. The memberships must be in the form of a written contract, signed by the buyer, and a copy must be provided to the buyer.

"Wow. OK, that's interesting because here, we didn't do that," Robinson said.

"We're not trying to cheat anyone out of anything," insisted Schrum in a phone interview. "To be perfectly honest, (the gym) went bankrupt. At the point when you're unprofitable for over a year, you run out of money. The overhead on the place to keep it going was $20,000 a month, and we never got there."

He said Robinson and the other members did have written contracts. He provided us a copy of Robinson's. It included her signature and consent to a month-to-month automatic billing. But he admitted she should not have been billed for October. "I can go into the system and check, and if she has not been credited back for a debit that occurred after the close-down, I am more than happy to issue a credit."

Robinson confirmed Schrum credited her account. Now she credits us for knowing to always request a written copy of a health club membership. It's for your protection. "Absolutely. I want some protection, and, of course, I learned my lesson from this particular case."

Schrum asked us to share his email address with any member who may have been unfairly billed. It's

Copyright 2017 WMC Action News 5. All rights reserved.