The former owners of several Maryland health clubs will pay $1.3 million in restitution and penalties for closing abruptly in 2010 and not refunding customers' money, said Maryland Attorney General Brian Frosh.
Frosh made the announcement of the final order against Gold's Gym on Friday, adding his Consumer Protection Division found the business violated the state's Consumer Protection Law and the state's Health Club Services Law. The former owners Eric and Kary Krieger owned facilities in Baltimore, Annapolis, Edgewater and Townson.
Frosh said in the final order the owners were misleading to customers by selling memberships, which required advanced purchases, even though it did not intend to provide the services the customers paid for.
"Health clubs can't keep collecting money from their members if they know they can't keep their doors open," Frosh said. "Consumers pay hard-earned money for these services and we'll make sure they either get what they paid for or be reimbursed."
Under the order, the Kriegers will pay $559,828 to about 7,555 customers in Maryland, and will pay $755,500 in civil penalties, which amounts to $1,000 per each consumer transaction, Frosh said.
He added the legally required bonds maintained by his office will also go towards repaying a portion of the membership costs to consumers, and he planned to continue to pursue the rest of the balance for customers.