Latest Posts
Home > Debt Articles > Consumer Protection > Stuck in a Contract: What to Do Before and After You Sign up for Clubs (Health/Timeshare/Camping/Travel)

Stuck in a Contract: What to Do Before and After You Sign up for Clubs (Health/Timeshare/Camping/Travel)

Whether you’re planning an excursion to the Virgin Islands, negotiating a timeshare in Vermont or thinking about getting into shape by joining a health club, the contract you sign will determine the rules you have to follow throughout the entire term of your agreement. Reading carefully before you sign will help you to avoid problems later. Generally, most contracts can be cancelled within three days of signing if you change your mind. After that, though, you could be stuck, so you’d better make sure you’re happy with all the terms.

Health Clubs

Choosing a Health Club

Often, people get lured into signing a health club contract by high pressure sales tactics, without considering whether or not they are able to make the time and financial commitments to make it worthwhile. Before signing a contract to join a health club, read it carefully. Pay particular attention to the cancellation and refund provisions and make sure you understand the duration of the contract. Before deciding to join, it is wise to tour the facility you are considering so you can see the type of equipment and classes offered.

Check to see if:

  • The hours of operation and location are convenient for you
  • The equipment is well-maintained
  • The club limits the number of future members to avoid overcrowding
  • The instructors are qualified
  • The club limits hours of use — men only or women only at certain times
  • The club has met state regulations, such as proper licensing
  • The cost of the club is affordable
  • The atmosphere seems friendly with staff willing to help you learn how to use the equipment, and
  • The club makes realistic representations about the results you can expect to obtain

Remember that if a problem arises after you join a club, the contract will govern how the problem is resolved. If items are missing from the contract and there is a problem, it probably will not be easily resolved.

Contract Considerations

Read through the entire contract before signing anything. Make sure the contract lists all the services and facilities and determine if any services require additional fees. See if the contract allows you to use other facility locations at no charge. Think about the term of the contract. Will you really use the club for two years or would it be better to sign up one year at a time? (In most states, a health club contract may not exceed three years.) Better still, negotiate with the club to allow you to try the facility for a short time. A trial membership allows you to visit the club at peak hours to see how crowded the club gets.

Make sure you fully understand exactly how much you will be required to pay and in what increments (all up front or monthly). Ask whether the fee you have been quoted includes an enrollment fee and any finance charges. Often you can negotiate with the club to eliminate initiation fees.

When you join a health club, the club should give you a copy of the contract. The contract should contain:

  • The name and address of the health club
  • The date the contract was signed
  • A full description of the club’s equipment and services, including the date any future equipment or services will be available for use. (Any future services or equipment should be available within 12 months of when the contract was signed, unless there are extenuating circumstances.)
  • The total cost, including initiation and membership fees, and whether or not these fees can be raised (most states have a limit as to how often the dues can be raised each year), and
  • Information about your cancellation and refund rights

Cancellation and Refund Policies

The vast majority of problems with health club contracts arise as a result of disputes regarding cancellation and refund rights. In most states, you have the right to cancel your membership for any reason within three days after signing a contract, called a cooling-off period. (Do not include legal holidays or Sundays when calculating the three-day period.) Cancellations should be in writing, preferably sent by certified mail, return receipt requested so you have proof of delivery. The club must refund your money within 30 days after receiving your written cancellation notice. The cancellation letter must usually be postmarked by midnight of the third day. If you elect to hand-deliver the notice to the club, ask the manager to initial and date the notice and keep a copy for your records. The club generally should give you a prorated refund of your initiation fee. However, if you signed a separate clause stating that the initiation fee is non-refundable, you are probably not entitled to any money back and you may be responsible to pay the rest of your initiation fee. After properly canceling your membership, you probably will not be obligated, to continue making payments, unless you financed the initiation fee and signed a non-refundable clause. In that case, you will still need to make payments until you have paid the initiation fee in full.

Often, if your contract is for greater than one year and you move more than 25 miles from the health club, you can cancel the contract if the club does not have an affiliation with a club within 25 miles of your new home offering the same services at no additional charge. Also, you are often entitled to a full refund if the club fails to provide equipment and services promised by the date specified in the contract. For example, the contract states that the club will have aerobics classes every half-hour and will be getting six new stationary bicycles by a certain date. The date passes and you discover that the club only offers aerobics classes once a week. In this case, you would be entitled to a full refund in several states.

Most states require that you receive a refund when the health club closes permanently and the owner does not own a comparable facility within 10 miles of the club. You would most likely be entitled to a prorated refund of your initiation fee.

The membership can usually be cancelled upon your death or total, and sometimes partial, disability. If the contract says part of the initiation fee is non-refundable, the nonrefundable portion can be subtracted out from the prorated refund. Prorated refunds are generally calculated by dividing the contract price by the total number of weeks in your membership and multiplying the result by the number of weeks remaining in your membership.

Health clubs cannot automatically renew your membership when the contract is over without getting your permission. The club must wait until the end of your membership before signing you up again, assuming you want to renew the membership. Before purchasing a health club membership, you may want to contact the consumer affairs office in your state to find out whether there are any state laws about health clubs that may affect you.

Common Problems With Health Clubs

  • High pressure sales tactics that intimidate people into purchasing memberships they may not have opted to buy. For example, a salesperson may fill out a long contract for a curious person who has come in to the club to take a look around. This makes the person feel guilty that the salesperson did all that work and causes him/her to join.
  • Misrepresentations about the facility’s equipment, staff or services
  • Offering low-cost trial memberships only to try to pressure people into buying more expensive memberships once they start using the low-cost plan
  • Pre-opening memberships that don’t open on the date specified. In most states, you are entitled to a full refund of your initiation fee if the club does not open on the date specified. Generally, you can also cancel the contract within the first five days the facility is open if you are not satisfied.

What if You Want to Get Out of Your Contract?

Getting out of a health club contract can be quite difficult, unless laws have somehow been broken. Your best bet is to contact the health club, explain that you desire to end the contract and request that it be terminated. Your chances of success will be greater if you can give specific reasons for your request, such as loss of a job leaving you unable to make payments, or health problems making it impossible for you to use the gym. Look at the contract you signed to see if it allows you to pay a penalty rather than make you accountable for payment for the rest of the contract term.

Many people join a health club with the best of intentions only to find themselves trapped in a contract for a club they have become dissatisfied with. Be an informed consumer before you enter an agreement you may be stuck with for a long time. Remember that if a problem arises after you join a club, the contract will govern how the problem is resolved. Make sure it is a contract you can live with.

Timeshare Clubs

As an alternative to purchasing a vacation home, many consumers have entered into timeshare agreements. For a lump sum, usually several thousand dollars, the consumer obtains the rights to use a specific property for a certain number of weeks per year. As with other types of clubs, before entering into an agreement that will bind you, you need to understand the fine print.

After identifying the particular timeshare you are interested in, contact the consumer affairs office in the state where the property is located to see if any complaints have been registered. The Real Estate Commission in the state where the property may be found generally regulates timesharing.

In reviewing the terms of the contract, consider:

  • Costs — Make sure the contract identifies all costs involved, including maintenance fees and taxes, closing costs, finance charges, commissions and any other miscellaneous charges. Ask whether any fees are subject to increase each year and, if so, whether there is an established maximum that the fees may be increased. Check with a few hotels in the area in which the timeshare is located to see whether their prices are comparable to that of the timeshare. This will also help you to negotiate a fair price if you decide to purchase the timeshare.
  • Cooling-off period — Most states allow for a period of time in which you can change your mind with no penalty. Make sure your contract specifically provides for a period of time where you can cancel the contract and receive a refund. Establish whether the cancellation must be in writing.
  • Terms — Make sure the contract includes promises made by the seller that may not have been in the original paperwork.
  • Cancellation/Refund clause — If at all possible, try to include a clause in the contract that allows you to terminate the contractual relationship if you decide at a later time you no longer wish to participate. Try to preserve your right to cancel at any time rather than only for a specified amount of time. For example, include a clause that allows you to cancel the contract after 30 days notice at any time rather than a statement that cancellation must occur within the first year, if at all.
  • Trading facilities — If you are interested in being able to arrange trades in other locations, make sure the contract specifically allows for that. Any associated costs should be clearly stated.

Before signing a contract, consider whether you will be able to make good use of the timeshare. Timeshares usually require that you use the property at the same time each year for the same length of time. Therefore, you may not have the option of vacationing at a different season or for a different length of time. If the timeshare is far from your home, you will need to spend money travelling to get there, which may become costly year after year. Even if you are ill or cannot travel to the timeshare for whatever reason, you will probably still be responsible for the costs outlined in your contract.

Getting Out of Your Timeshare Agreement

Your first step in trying to end a contractual relationship is to review the provisions you have agreed to in the contract. Look for a clause allowing cancellation. Next, find out whether your state has enacted any laws that may be of help in canceling the contract. Many states have laws regarding timeshare arrangements. Ask if you can pay a penalty rather than paying the full amount of the entire term of the contract.

Campground/Travel Club Memberships

Often, consumers are lured into purchasing a travel club or campground membership after receiving an unsolicited letter in the mail stating that they have been specially selected to win a prize. A list of possible prizes are generally named, including a high-price item such as a car or boat. Usually, consumers are instructed to contact the resort to make an appointment to claim their prize. Once the resort is contacted, consumers learn that there are certain “eligibility” requirements to claim the prize. Consumers are asked to give information about their employment, salary range and credit. Often, even after viewing the resort, prizes are either not awarded if a membership is not purchased or are of a different quality than that represented in the solicitation.

In this short scenario, a host of violations of state law, generally referred to as unfair and deceptive acts and practices, have occurred. Rather than being “specially selected,” names of persons to receive the letters are usually random names obtained from mail order houses. A resort may not require a consumer to purchase a membership in order to receive a promised prize. Likewise, the resort may not misrepresent that the prize is of a certain value or fail to disclose the odds of winning a particular prize. Usually, a large, expensive prize is not awarded by each particular resort, but rather, by the greater industry. Remember that an announcement that you have been “selected to receive” a club membership or vacation does not mean that it will be free.

The Sales Presentation

Upon visiting the resort, the consumer will probably be given a tour and told that the resort is authorized to allow the consumer to purchase a membership for a much lower price than the average person, since he or she has been “specially selected.” However, the consumer is warned, the reduced price may only be offered on that particular day and will be withdrawn after the consumer leaves the resort. Legitimate companies generally do not expect a consumer to make a quick decision without allowing time to carefully consider an offer. During the sales presentation, it is unlawful for resorts to:

  • Continually try to convince the consumer to purchase a membership, even when it becomes apparent that the consumer is unable to afford the initial cost or subsequent payments
  • Trap the consumer for long periods of time to give a very long sales pitch
  • Misrepresent the current facilities or future improvements planned
  • Ask for or accept postdated checks or a credit card, knowing that the consumer did not have sufficient funds or credit to cover the payment
  • State that only a few memberships are left, if that is untrue
  • Insist that the consumer participate in events aimed at promoting the sale of a membership to receive a promised prize, or
  • Pretend to offer certain special discounts for one-day only or to certain groups, such as newlyweds, when the price is the same regardless of the day or people involved

Contract Considerations

After the tour, a consumer who desires to purchase a travel or campground membership may be expecting to receive information regarding the terms and conditions of the sale. Instead, the resort employee may give the consumer merely an agreement to purchase the membership with little details about the actual benefits of the membership. At this stage, consumers should expect the contract to contain:

  • A statement of the total price, including down payment and any extra costs
  • Information about how to cancel the contract
  • A clause allowing both the resort and the consumer to cancel the contract
  • Obligations and duties owed by both the resort to the member and the member to the resort
  • Detailed information regarding whether the consumer is permitted to use other facilities and amenities included, and
  • Statement about whether the membership is transferable or assignable

Consumers should be wary of contracts which include:

  • A statement that the consumer will forfeit all monies paid in the event the consumer defaults
  • Forms which are notarized at the resort (consumers should realize that even contracts that are notarized may be cancelled)
  • References to other documents which are not attached and the consumer has not had the opportunity to read (for example, a section which may refer to “the attached plan” or “attachment A” which is not included in the contract given to the consumer), and
  • Statements that the contract cannot be cancelled at any time

Practical Suggestions

Before entering into a travel or campground membership, consumers should weigh the likelihood of continued use of the membership together with the ongoing financial obligation. Next, listen carefully to the sales presentation for specific details about the membership. If the membership is for a travel club, get the names of hotels, airlines and restaurants included in your package.

Do not accept vague statements that the package includes “all major hotels and/or airlines” or you may be quite disappointed with the quality of the services you are offered. Finally, do not sign the agreement until you have received and read all documents. Once you sign, it is extremely difficult to get out of the agreement unless the resort has acted improperly. You can try contacting the membership office and explaining that you wish to cancel your contract. Hopefully, the contract includes a clause that allows you to end the contract without paying the full contract price. If not, ask about the possibility of paying a penalty rather than the full price.

Common Threads in All Types of Contracts

First and foremost, DO NOT SIGN A CONTRACT WITHOUT READING IT! Remember that the terms of the contract will govern disputes that arise. Be an informed consumer before you agree to sign up. If you are not sure about certain details, do not hesitate to ask for more information. If you have agreed to terms that you become unable to meet, you will most likely still have to pay. Think about the term of the contract. If it is for a long time, decide whether you will be able to meet the financial and health requirements to participate for years to come. A cancellation clause will be your greatest help in your effort to cancel the contract. If your contract does not contain a cancellation clause and nothing illegal has transpired, chances are you’re STUCK!

If you feel your rights have been violated or you have been treated unfairly, there are several sources to assist you. Draft a detailed letter outlining the circumstances and explaining how you feel you have been treated improperly. Send a copy of the letter to the other party indicating that copies have also been sent to the Federal Trade Commission, the state consumer protection agency and the Better Business Bureau. Hopefully, either this will entice the other party to be more cooperative in resolving the problem or you will receive needed help from these organizations. Finally, find out whether your state has enacted any laws that may help. Club memberships have been a topic of discussion among several lawmakers and several states have enacted laws aimed at helping consumers.

About Amanda Miller

Amanda Miller
  • Joyras7

    Where can I find information about the law that prohibits companies from postdating credit cards?  I foolishly bought into a travel club.  When they talked about how much I had to pay upfront, they would not accept a smaller amount.  I paid what I could then and then they had me set up a later payment to cover the rest.  I have a paper that documents that.  Because I am trying to get the refund, I want to find whatever leverage I can to get them to go against their “no refund” policy.  They have other shady practices, but am trying to find specific laws to bring to their attention.  Thanks for nay help you can offer!

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.