LA Fitness's 'Cancellation Treadmill' Runs into a Wall with the FTC

The Federal Trade Commission recently filed a lawsuit against one of the nation's largest gym chains, LA Fitness, marking a significant move in the agency's ongoing battle against illegal subscription practices and “dark patterns”. The complaint alleges that the company has illegally charged consumers hundreds of millions of dollars by trapping them in memberships with an intentionally difficult and confusing cancellation process with each process being described as "opaque, complicated, and demanding".

Which is not the ideal way for the FTC to describe any of your business practices...

For any business that uses a subscription or recurring revenue model, this case serves as a critical lesson in FTC compliance and a powerful example of what the agency considers illegal dark patterns.

Anatomy of an Unlawful Cancellation Process

The FTC's complaint alleges that for years, LA Fitness required consumers to cancel their memberships using one of two complex and difficult methods: in-person or by mail. Both processes were allegedly filled with unreasonable obstacles designed to prevent customers from exercising their ability to cancel.

- The Website "Scavenger Hunt": The company actively encourages members to use its mobile app for everything from checking in to booking classes. However, to cancel their memberships, members were instructed to first log into the company's website to print a form. Let me repeat.....the app required them to go to a website and PRINT A FORM. This process was often a dead end, as consumers frequently did not know their website login credentials. To reset them, a consumer needed their original email, a "key tag number," and the first five digits of their payment method on file.

- The In-Person Gauntlet: After navigating the difficult login and finding a printer, consumers then had to bring the form to a gym location. However, the complaint states that cancellations were only accepted during restrictive hours--typically 9 a.m. to 5 p.m., Monday through Friday. Worse, members had to submit the form to one specific employee, the Operations Manager. The FTC alleges that this manager was often unavailable, even during the posted hours, leaving consumers unable to cancel.

- The Burdensome Mail-In Option: The mail-in process required the same difficult steps to obtain the form. The company also recommended that consumers send the form via certified or registered mail, adding extra cost and requiring a trip to the post office. According to the complaint, even after consumers jumped through these hoops, the company frequently did not process the mailed-in requests.

- The Hidden Rules: The FTC alleges that add-on services, such as childcare or towel service, were separate negative option programs with a much easier cancellation process--simply speaking to any front-desk attendant. However, this simpler method was not disclosed to consumers. Furthermore, accounts with multiple family members required a separate, burdensome cancellation process for each individual member.

Violating the "Simple Mechanism" Rule

These alleged practices are not just poor customer service; the FTC argues they are illegal. A core violation cited in the complaint is of the Restore Online Shoppers' Confidence Act (ROSCA), a federal law that requires businesses to, among other things, provide "simple mechanisms" for consumers to stop recurring charges.

The layers of obstacles--from the difficult website login to the hunt for a specific manager during limited hours--are precisely what the FTC has labeled as "dark patterns." These are manipulative design choices that subvert consumer autonomy and create unreasonable barriers for people who want to end a service. By failing to provide a straightforward Right to Cancel, LA Fitness is alleged to have violated federal law.

Key Takeaways for Your Business

1. Your "Right to Cancel" Must Be Simple. The central lesson from this lawsuit is that a cancellation process cannot be overwhelmingly more difficult than the sign-up process. The FTC expects a "simple mechanism". If customers can join online in two minutes, they should not have to complete a multi-day quest to cancel.

2. Disclose All Terms Clearly. LA Fitness allegedly failed to clearly and conspicuously disclose its difficult cancellation requirements to consumers before collecting their billing information. The company also failed to disclose that add-on services could be canceled through much easier means. Full transparency is a cornerstone of FTC compliance.

3. Empower Your Staff to Help. Your front-line workers are your best compliance team. Let them help customers. The complaint alleges that LA Fitness management directed staff to refuse escalated cancellation requests submitted via phone or email, instead forcing them to follow the broken process. This occurred even though managers had the technical ability to cancel memberships in their systems. Your customer service should be designed to resolve issues, not to act as a gatekeeper.

4. Don't Ignore Consumer Complaints. The FTC noted that LA Fitness received "tens of thousands" of consumer complaints about its difficult cancellation practices but continued them for years. Listening to customer feedback is not just good business; it is a crucial compliance tool that can alert you to illegal dark patterns in your own systems.