📋 When a federal agency files a lawsuit accusing a corporation of stealing hundreds of millions of dollars from its own customers, it should be front-page news. On December 23, 2025, the Federal Trade Commission filed an amended complaint against Fitness International, LLC and Fitness & Sports Clubs, LLC, the companies that operate LA Fitness, Esporta Fitness, City Sports Club, and Club Studio, alleging a years-long scheme to trap consumers in recurring fees they desperately wanted to end.

The complaint describes more than a billing mistake or a clunky website. It describes a system, carefully constructed and consistently maintained across more than 600 gym locations and over 3.7 million members nationwide, specifically designed to make leaving as difficult as possible. The FTC alleges the companies knew exactly what they were doing. They had tens of thousands of internal complaints. They had thousands of reports filed with state and federal authorities. They changed nothing for years. And when regulators came knocking, they waited eight months before making even the most superficial adjustments.

Inside the Cancellation Trap: The Allegations in Detail

The FTC complaint details two official cancellation methods LA Fitness offered to members: cancellation in person at the gym, and cancellation by certified mail. Neither was designed to work.

The In-Person Obstacle Course

To cancel in person, a member first had to log in to LA Fitness’s website. This sounds simple until you understand that LA Fitness actively directed its members toward its mobile app for virtually everything. Members checked in at the gym through the app. They booked classes through the app. They received a time-sensitive QR code at signup that automatically logged them into the app. Nobody guided them on how to use the website. So when cancellation time came, many members had no idea their website login credentials even existed, much less what they were.

Resetting those credentials required providing the original email address from signup, a “key tag number” assigned at enrollment, and the first five digits of the payment method on file. The FTC notes that many members could not provide all of this information, even when they tried. One member reported to the FTC that the website claimed to send a reset email that never arrived.

Members who survived the login hurdle still had to print a cancellation form. At home. On a printer. The FTC notes that many consumers simply do not have printers, and that this was an intentional friction point. One member wrote directly: “I don’t have or use a printer and think this is just a way to keep deducting money from my account, hoping I will forget about it.”

Members who printed the form then had to physically travel to a gym location during the designated cancellation window: 9 a.m. to 5 p.m., Monday through Friday only. This was at gyms that operated for up to 19 hours a day, seven days a week. The FTC alleges the restricted hours were intentional: they overlap almost entirely with standard working hours, ensuring that most employed adults could not cancel without taking paid time off.

Once at the gym during those hours, the member could not hand the form to any of the staff at the front desk. They could not hand it to the sales team. They could not hand it to the two additional managers on site. The form had to go to one specific person: the Operations Manager. If that manager was unavailable, the member had to leave and return another day. The FTC complaint quotes the company’s own FAQ, which acknowledged cancellations were “subject to change depending on the availability of the Operations Manager,” effectively admitting no cancellation window was guaranteed.

The Mail-In Trap

The second official method, cancellation by mail, required the same impossible login and print process to obtain the form. Then, the company “recommended” sending the form by certified or registered mail, presenting this recommendation in a list of requirements without clarifying that anything less would be acceptable. Both certified and registered mail require a trip to the post office during post office hours and an additional out-of-pocket fee.

The FTC documents cases where members sent multiple certified letters with delivery tracking confirmation, watched the tracking show “delivered,” and continued to be billed anyway. One member sent three certified letters over four months for a personal training membership and received no cancellation. Another reported sending five letters total, paying for each one, and remaining on the hook.

The Add-On Services Deception: A Second Layer of Corporate Greed

LA Fitness offered more than 50 optional services and amenities on top of base memberships, including towel service, childcare, personal training, HIIT classes, Pilates, hot yoga, and cryotherapy priced as high as $249 per month. The FTC alleges the company enrolled members in these recurring charges without disclosing that they were separate programs with separate cancellation requirements.

Critically, the FTC says these add-ons could actually be cancelled by speaking to any front desk employee, through a far simpler process. The company never told members this. Instead, it represented the add-ons as part of the same membership package, leading members to believe they faced the same impossible cancellation maze for each service. Many members paid for add-on services for months or years without understanding they had a simpler path out.

Personal training memberships added another trap. These agreements ran for six to twelve months with automatic rollover to recurring monthly billing. Canceling before the end of the term triggered a fee equal to 50 percent of all remaining dues through the contract’s end. The FTC alleges the company did not disclose this cancellation penalty before collecting signatures.

Profit-Maximization at All Costs: The Business Logic Behind the Trap

The FTC complaint makes clear that this was not administrative incompetence. The company had the technical capability to process cancellations through its own management software. Managers at individual gym locations could cancel memberships in their computer systems at any time. The company chose to prohibit them from doing so unless the consumer physically arrived with the right form during the right hours and found the right manager. When members escalated complaints by phone or email to corporate headquarters, those complaints were routed back to the same local managers with scripts directing them to refuse the request and redirect the member back to the in-person or mail process.

The company understood what it was doing. The FTC documents that it received tens of thousands of internal cancellation complaints. It received thousands more complaints through the Better Business Bureau and state attorneys general. It knew the cancellation process was generating complaints at a higher volume than any other issue it handled. It chose, for years, to do nothing. Its internal script for consumer complaints claimed the process existed “to protect the privacy of our members,” a justification one consumer called out directly: “There’s no privacy protection for members, you guys just want to make it difficult.”

The company demonstrated it understood simpler cancellation was possible: it offered easier cancellation methods in the small number of states with laws specifically requiring them. Everywhere else, it kept the maze in place. The FTC notes that the company waited eight months after receiving a formal Civil Investigative Demand from federal regulators before offering any online cancellation option at all, and that even the new online option buried cancellation behind unnecessary login steps while burying any mention of it after the two more cumbersome methods during signup.

The Enrollment Funnel: How They Got You In Before You Knew the Terms

The FTC complaint describes a website enrollment process deliberately structured to collect billing information before disclosing any cancellation terms. The four-page enrollment flow moved members from selecting a location to selecting a membership to entering payment information to a final confirmation screen. Cancellation terms appeared nowhere on the first three pages. On the fourth and final page, the membership agreement was technically accessible, but only through an “inconspicuous gray button.”

Members who enrolled in person at gym locations received no better treatment. Sales staff used a proprietary app to collect payment information before presenting the membership agreement on a screen. Members signed using electronic signature pads and, according to the FTC, many were never provided with a copy of what they signed, whether by email or in print. The sales session concluded with a prompt to book a “fitness assessment,” which the FTC says was used as a sales opportunity to pitch personal training memberships through the same opaque agreement process.

How Capitalism Exploits Delay: Inaction as Profit Strategy

The delay between when LA Fitness knew about widespread harm and when it made any change is not a footnote; it is the business model. Every month that a consumer remained unable to cancel represented continued billing revenue. Tens of thousands of complaints represented tens of thousands of billing cycles that continued generating revenue. The cost of doing nothing was borne entirely by consumers. The benefit of doing nothing accrued entirely to the company.

This dynamic, where the financial incentive to delay remediation far outweighs any regulatory risk, represents one of the most consistent structural features of consumer harm under contemporary corporate capitalism. Companies in this position are not making an ethical error. They are executing a rational calculation. The system, as designed, rewards the delay.

The FTC’s complaint notes that the company changed its cancellation procedures only after learning of the commission’s investigation, and even then made only superficial modifications while remaining in the business and continuing to expand. The complaint explicitly notes this as evidence the company maintains both the means and the incentive to resume unlawful conduct.

Legal Minimalism: Complying With the Letter While Violating the Spirit

One of the most revealing details in the FTC filing is that LA Fitness offered easier cancellation methods in states where state law specifically required them. This means the company knew simpler cancellation was operationally achievable. It chose to withhold simpler cancellation from the millions of members in states without mandatory requirements, not because it was technically impossible, but because it was not legally compelled.

This is what legal minimalism looks like in practice: treating the law as the ceiling of obligation rather than the floor, deploying compliance as a floor that permits maximum extraction everywhere the floor has not been explicitly installed. The company’s behavior in states with protective laws was not ethical conduct; it was the minimum performance required to avoid state-level liability. The rest of the country remained a billable captive audience.

Corporate Accountability Fails the Public: What the Law Can and Cannot Do

The FTC seeks a permanent injunction, monetary relief, and other remedies. The filing does not yet specify a dollar amount, but it alleges “hundreds of millions of dollars” in unlawful charges. Given that the company operated this system for years across 3.7 million members, the total harm likely exceeds any fine that will ultimately be imposed.

No individual executives are named in this complaint. The corporate entities bear the liability. This is a consistent feature of corporate accountability enforcement in the United States: the institution pays, the individuals who designed and maintained the system continue to manage other institutions. The FTC Act provides for monetary judgment and injunctive relief, but no mechanism for holding the specific people who wrote the refusal scripts or designed the four-page enrollment flow personally accountable.

The company’s documented practice of quickly resolving complaints filed through the Better Business Bureau or state attorneys general, while refusing the same relief to consumers who contacted the company directly, reveals the underlying calculation with uncomfortable clarity. Complaints that created regulatory visibility were resolved. Complaints that created only consumer frustration were denied. The company sorted its responses not by the merit of the consumer’s claim but by the level of scrutiny the claim attracted.

Pathways for Reform: What Must Change

The FTC’s complaint against LA Fitness is a specific application of authority under the Restore Online Shoppers’ Confidence Act, a 2010 law that requires businesses using automatic renewal features to provide simple cancellation mechanisms and clear disclosures before collecting billing information. The law existed. The company violated it for years anyway. Stronger enforcement with faster response timelines and higher per-violation penalties would change the corporate calculation that makes delay profitable.

Beyond this specific case, several structural reforms would reduce the class of harms this lawsuit represents. Mandatory “click to cancel” requirements, already being pursued by the FTC through its Negative Option Rule rulemaking, would require businesses to offer cancellation through the same channel used for enrollment. A consumer who signed up online could cancel online, without a printer, a certified letter, or a Monday-through-Friday trip to find a specific manager.

Automatic refund rights for unauthorized charges, triggered without requiring consumers to prove harm through an adversarial dispute process, would shift the financial risk back onto companies that design cancellation mazes. And executive accountability provisions, making individuals personally liable for systematic consumer protection violations, would end the structural separation between the people who benefit from these schemes and the entities that bear their costs.

This Is the System Working as Intended

LA Fitness’s cancellation trap was not a product of negligence. It was a product of incentives. The company operated in a market where consumer protection enforcement was slow, penalties were manageable, and the cost of trapping millions of consumers in unwanted recurring charges for years was, by the company’s apparent calculation, worth accepting. The tens of thousands of internal complaints were data points in a business model, not moral alarms. The thousands of Better Business Bureau reports were managed PR risks, resolved selectively to minimize regulatory exposure rather than to correct harm.

This is how modern consumer capitalism functions when corporate ethics gives way entirely to profit maximization: the harm is real, the victims are millions of ordinary people trying to cancel a gym membership, and the mechanism is a bureaucratic maze that a billion-dollar company designed, maintained, and defended for years. The FTC lawsuit is not an aberration; it is evidence that the system required external compulsion to produce what basic corporate accountability should have delivered voluntarily.

Conclusion: The Human Cost Behind the Corporate Calculus

Behind the complaint’s dry legal language are real people. The son who traveled for work and only came home on Sundays, unable to cancel a membership for years because cancellations required weekday office hours. The member who sent five certified letters with tracking confirmation and kept getting billed. The person who called corporate headquarters, explained their situation, and was told to call back tomorrow before being hung up on. The parent paying for multiple family members who successfully cancelled one account while continuing to be billed for others, unable to reach anyone who could help.

Each of these people paid for LA Fitness’s obstruction with their money, their time, and their frustration. The company collected hundreds of millions of dollars through this system. It knew. It chose to continue. The law now compels a reckoning. Whether that reckoning will be proportionate to the harm, and whether it will deter the next company from running the same calculation, remains to be seen.

Frivolous or Serious Lawsuit?

This lawsuit is serious, and the evidence in the FTC’s own filing makes that plain. The core allegations rest on documented facts: the company’s own cancellation instructions, its own FAQ admissions about manager availability, its own scripts directing staff to refuse escalated cancellation requests, and its own differential treatment of members depending on whether their complaints attracted regulatory attention. The company’s behavior of changing its practices only in states with mandatory legal requirements, and only after receiving a federal Civil Investigative Demand, strongly supports the FTC’s argument that the company chose its cancellation practices deliberately and had the capacity to change them at any time.

The FTC Act and ROSCA both directly address the conduct alleged here. The law requires that companies offering negative option programs provide simple cancellation mechanisms and clear pre-billing disclosures. The complaint documents specific ways the company failed both requirements, across multiple membership types, over multiple years. The accumulation of consumer complaints, the documented refusal scripts, and the company’s own concessions in state attorney general responses all provide substantial evidentiary foundation. This is not a close call. The FTC has built a detailed factual record that will be very difficult for the defendants to rebut.