Credit control policies
The company took legal action against 522 of its members between 30 March and 15 September 1999 for non-payment of subscriptions. Many of these were in fact members who did not want to renew and had allowed their membership to lapse, or who had not given the required 1-month's notice stipulated in the contract. The judge at the Small Claims Court criticised the company for allowing the credit to roll on for at least one month before taking action. The company argued that its policy was to avoid unilateral termination by them as it would cause members to pay a rejoining fee.[7]
Monitor complaints in Singapore
California Fitness clubs in Singapore were hit by a significant number of consumer complaints filed against them with the Consumers Association of Singapore (CASE) between 2011 and 2014. Gripes against California Fitness and a rival True Fitness made up more than three-quarters of 86 complaints involving fitness clubs filed last year[8] with the former receiving 35 complaints against it in 2013. As of April 2014 nine complaints were filed against California Fitness with CASE.
California WOW Xperience
California Fitness centers (CalFit) in Thailand began operating in 2002, were sold (or rebranded) as California WOW Xperience (set: CAWOW)in 2005 (CalWow), a totally separate company yet started by people with connections to 24 Hour Fitness founders like Mark Mastrov, with the California Fitness founder Eric Levine as the CEO, bringing in outside investors such as Bank of Ayutthaya. In Thailand this allowed it fund a domestic expansion from 2 to over 13 locations as well as then expanded to many countries, including Korea, outside Thailand as franchise locations. The franchises didn't last more than 2 years in Korea, these franchisees abruptly closed doors on members in Korea by 2006, who had been sold expensive lifetime memberships. The cross-membership agreements between California Fitness and 24 Hour Fitness were rolled into California WOW Xperience, however once financials became worrisome in August 2008, cross-memberships were terminated between CalWow and 24 Hour Fitness (USA), but remained between Asian chains CalWow and CalFit and between CalFit and 24 Hour Fitness. In August 2008, California Fitness and 24 Hour Fitness were terminated. In 2009, Malaysian branches of CalFit were sold to Celebrity Fitness, whose founders also had ties to 24 Hour Fitness. Despite company changes, California WOW Xperience is still frequently confused with California Fitness.
In 2012, California WOW Xperience found itself entangled in a financial dispute and was sued in Thailand's Bankruptcy Court by Bangkok Bank Plc. which sought the repayment of a 72 million baht loan including 4 million baht in interest.[9] As a result, California WOW Xperience shut down seven of its eight branches in Thailand. The company faced much criticism for continuing to sign up customers at the various branches until their date of closing. In August 2012, more than 200 members, many of whom found themselves unable to travel to California WOW Xperience's single remaining Thailand branch to make use of long term or lifetime memberships, filed complaints against the company in hopes of being refunded. The Foundation for Consumers along with 100 former customers have filed a lawsuit against California WOW Xperience which is now awaiting a court order.[10] Incidentally, this was also the very same month 24 Hour Fitness was sold in USA. At roughly the same time, CalFit Taiwan gyms abruptly closed on customers, some who had been sold lifetime memberships, and these became World Gym centers. Membership was honored at the new gym over for a few months and then terminated.
In 2016, CalFit itself abruptly closed doors on members in Hong Kong and Singapore, some who had been sold lifetime memberships.
Watchdog complaints in Hong Kong
In April 2016, Consumer Council censured California Fitness for intimidation and misleading sales practices.[11] The council said complaints regarding California Fitness had increased continuously in the previous few years, from 227 cases in 2013 to 296 cases in 2015, despite the council having already given several warnings. In 2015, California Fitness represented more than half of the complaints regarding fitness centres, and the value involved reached to 8.5 million Hong Kong dollars.[11] The council had met with company management in January, and made its censure public after the situation failed to improve. In most of the cases, The sales use "free trial" or "free gift" as excused to attract new customers to enter their centre and collect identity card and credit card from the customers, then convince, mislead and force them to sign the contracts and pay for membership, as well as training courses. Some of the sales even force the customers to take a picture with smiling face to prove the contracts are based on their own willing. Some of the cases involve persons with intellectual disability.[12]
Two members of staff were arrested by customs officers on 18 May after a customer claimed she had been coerced into paying for private training classes after her credit card was charged HK$140,000 without her consent. The two staff at the Causeway Bay branch of the gym operator chain were accused of violating the unfair trade practice provision under the Trade Descriptions Ordinance.
