Go Workout Frandor LLC and its owner, Steven Millenbach, were ordered to pay a civil penalty and damages totaling $123,020 after the business violated the Michigan Consumer Protection Act (MCPA) through deceptive practices, Michigan Attorney General Dana Nessel announced on Tuesday.
Ingham County Circuit Court Judge James Jamo issued the default judgment last Friday.
Go Workout Frandor and Millenbach will pay $98,020 to the Attorney General's Office for disbursement to affected consumers. In addition, Jamo imposed a civil fine of $25,000 for violating the MCPA. But consumers are cautioned that more work remains before reimbursements will be possible.
After multiple complaints from customers, Nessel's office issued a notice of intended action in February 2019 against Go Workout Frandor and Millenbach, followed by a class-action lawsuit in April. Millenbach then filed for bankruptcy in July. While Millenbach hopes to discharge the money owed to consumers in the bankruptcy proceeding, the attorney general will next be using Jamo's order as part of a petition to the bankruptcy court to prevent that from happening.
"Mr. Millenbach owes his customers more than simply an apology, and his attempt to sidestep that obligation by filing for bankruptcy is wrong," Nessel said. "If business owners think they can mislead and dupe their clients, then avoid accountability by claiming bankruptcy, they are sorely mistaken. These consumers deserve financial reimbursement for the deceptive business practices used at Go Workout Frandor, and my office is taking the appropriate steps in court to ensure these people receive the money they are entitled to."
In his order, Jamo found the Lansing-based, women-only gym to have violated the MCPA by misleading customers through false advertising and deceptive claims about goods and services, and failing to provide clients with refunds, among other things.
When the lawsuit was filed in April, more than 40 consumer complaints had been received since 2018, many of which raised similar concerns about the business that included:
- Failing to provide promised refunds.
- Advertising no-contract memberships but selling 12-month contracts.
- Selling memberships after the owner knew the gym would not continue offering services at the same location, and failing to inform customers the gym was closing or relocating.
- Offering inadequate alternatives to customers specifically, a hotel facility without comparable space, equipment or amenities, or requiring customers to go to distant alternative locations that did not offer the same benefits.
The gym solicited memberships even as eviction proceedings were underway in August 2018. The facility then relocated from the Frandor Shopping Center to a substantially smaller room in a nearby hotel, where customers were expected to share limited equipment and a pool with male and female hotel guests. Millenbach and Go Workout failed to make refunds to customers who paid sign-up fees and advanced membership fees with the expectation they would have access to the now-closed Frandor gym.
Consumers can file a complaint online with the Attorney General's Office at https://secure.ag.state.mi.us/complaints/consumer.aspx or call the Consumer Protection Division between 8:30 a.m. and 4:30 p.m. Monday through Friday at 517-335-7599 or toll free at 877-765-8388.
Published: Thu, Feb 06, 2020
