Collins Interviewed by Bloomberg Law Regarding FTC Suing LA Fitness Over Cancellation Practices

The Federal Trade Commission has filed suit against the operators of LA Fitness, alleging that the company makes it excessively difficult for customers to cancel memberships, resulting in unwanted recurring charges.

Shawn Collins, Partner at Stradling, shared his perspective on Bloomberg Law regarding the FTC’s case. Collins noted that while states like California, New York, and Florida have long required “easy cancellation” mechanisms under their auto-renewal laws, federal law has not developed the same level of specificity.

“California amended its statute years ago to require that if a consumer signs up online, they must be able to cancel online just as easily,” Collins explained. “Federal law, however, doesn’t define what a ‘simple cancellation mechanism’ means, which makes this case far more complicated.” Collins also observed that the FTC’s action likely followed years of complaints and a lengthy investigation. He highlighted the potential challenges the FTC faces in proving that LA Fitness’ policies amount to an institutional practice nationwide, rather than isolated incidents.

Ultimately, Collins suggested that the case underscores a larger issue: the gap between state consumer protection statutes and outdated federal laws. “To truly address these recurring issues, federal legislation will need to mirror the standards already established in states like California and New York,” he said.