Archives > 1976 South Carolina Code of Laws - Previous Versions > 2002 Session > Title 44

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SECTION 44-79-10. Short title.

This chapter may be cited as the Physical Fitness Services Act.

SECTION 44-79-20. Definitions.

As used in this chapter:

(1) "Physical fitness services" means facilities or services for the development of physical fitness through exercise or weight control. The term includes the facilities and services of health or exercise centers, clubs, studios, or classes; health spas; weight control centers, clinics, or studios; figure salons; tanning centers; and athletic or sport clubs. It does not include rehabilitative therapy administered by a licensed physical therapist.

(2) "Customer" or "member" means a person who contracts for the use of physical fitness services.

(3) "Major facility" means swimming pool, whirlpool, tennis courts, racquet or handball courts, indoor or outdoor track, gymnasium with exercise equipment, calisthenic room, or similar collection of physical fitness equipment.

(4) "Major service" means locations which have offices, treatment rooms, or counseling rooms but no major facilities and other treatments, visits, or sessions to reduce and control weight.

(5) "Center" means any person or organization which, for profit, offers physical fitness services, whether at multiple outlets bearing the same name or a single outlet. Any subsidiary of a center, operating under the same name and offering such services, is a part of the center.

(6) "Outlet" means a separate location of a center which is not physically connected with another center but which uses the same name.

(7) "Administrator" means the administrator of the South Carolina Department of Consumer Affairs.

SECTION 44-79-30. Credit contract requirements.

(A) Every prepaid or credit contract for physical fitness services of over three months' duration or over two hundred dollars in amount must conform to the following requirements:

(1) the contract must be in writing, and a copy must be given to the customer at the time he signs it;

(2) the contract shall state clearly the street address or location of the center and outlets which the member may use at the time the contract is executed and the major facilities or major services which each offers;

(3) the contract shall reveal the finance charge, if any, which the member agrees to pay;

(4) if the customer executes a promissory note in connection with the contract, the contract shall clearly indicate whether the promissory note is assignable paper and whether it may be discounted and sold to third parties. Assignment of the promissory note does not affect the right of the member to cancel the contract or the method by which the cancellation may be made;

(5) the contract must contain a right to cancel provision in the following language:

"CUSTOMER'S RIGHT TO CANCEL

(a) You may cancel this contract by sending notice of your wish to cancel to the center before midnight of the third business day after you sign the contract. 'Business day' means Monday through Friday excluding state holidays and federal holidays. This notice must be sent certified mail to the following:

______________________________

Within thirty days of receipt of this notice, the center shall return any payments made and any note or other evidence of indebtedness. If you use the seller's facilities or services, the center may deduct a reasonable fee from the payments being returned based on the actual fee paid divided on a pro rata share by the number of days used by the customer.

(b) In addition, you or your estate may also cancel the contract at any time by written notice to the center at the above address if the following circumstances occur:

(1) the customer's death;

(2) substantial physical disability, certified by a physician, which makes it permanently impossible for the customer to use the center's services;

(3) the customer's permanent relocation to a residence over fifty miles distant from an outlet operated by the center, if the center is unable to arrange for the customer's use of another center with equivalent major facilities and services.

The center may require presentation of information to substantiate that one of these circumstances has occurred.

If the contract is cancelled because of disability, death, or permanent change of residence, the center shall return any note or other evidence of indebtedness and unearned prepayments as follows: For each month that the contract was in effect, the center is entitled to the rate a month or a treatment which it would have charged if the contract had initially been one for the number of months or the number of treatments for which the contract was actually in effect. The rate is to be determined from a fee schedule in effect on the date of the contract.

(c) The right of cancellation shall affect only the financial obligations under the contract and customer's right to use the center's physical fitness services."

(6) services such as personal training, personal fitness testing, and daily visitor fees that are not subject to being refunded must be clearly stated in the contract;

(7) Any contractual provision allowing more liberal rights of cancellation than set forth in this chapter may be substituted for the notice required in this chapter.

(B) A contract is not required for personal training, private consultations, and fitness testing rendered on an hourly basis unless they are part of a package of over three hundred dollars.

SECTION 44-79-40. Prohibited contractual provisions.

No contract for physical fitness services may:

(1) have a duration of longer than twenty-four months or be measured by the life of the buyer, the life of the center, or any similar indefinite term; provided, however, if a center demonstrates financial responsibility to the administrator of the Department of Consumer Affairs and has been in operation for five or more years in this State, it may offer contracts for physical fitness services for a period of up to thirty-six months if approved in writing by the administrator;

(2) waive the required provisions of this chapter;

(3) provide that a right of action or defense of the member may be cut off by assignment of the contract to a third person.

SECTION 44-79-50. Unenforceability of prohibited contractual provisions.

Any provision of any contract for physical fitness services which does not comply with this chapter is unenforceable against the member.

SECTION 44-79-60. Permissible contractual provisions.

A contract for physical fitness services may contain clauses which:

(1) provide for extension of the term of the agreement for a period equal to a period of temporary disability or pregnancy of the customer, or for any other just or reasonable cause;

(2) specify that the written contract constitutes the entire agreement between the parties;

(3) provide for a renewal option, which to be enforceable must be exercised by the buyer in writing, or by payment by the buyer of part or all of the renewal price. Any renewal option may be exercised only near the expiration of any previous contract and for only twelve months.

SECTION 44-79-70. Rights against successors to contract.

Any right of action or defense which the member may raise based on the contract for physical fitness services is preserved against any assignee or successor to the contract.

SECTION 44-79-80. Financial responsibility requirements; certificates of authority.

(1) Every center which enters into prepaid or credit contracts for physical fitness services of over three months' duration or over two hundred dollars in amount shall maintain with the administrator a surety bond in a sum to be determined by the administrator based on the estimated future costs to service contracts sold, but not to exceed fifty thousand dollars.

(2) In lieu of the bond required in this section, the center may furnish under penalty of perjury information which reasonably demonstrates financial responsibility as will enable the center to satisfy the possible claims against the bond. In the event the center is controlled by, under common control with, or controls other corporations and the other corporation agrees in writing to satisfy the claims against a bond allowed under this section, the financial responsibility of the other corporation must be considered in determining the requirement for a bond. In determining whether the center has the requisite financial responsibility, the administrator may consider the operating and business history, reputation, and management within and without the State, as well as the operating and business history and reputation of any business controlled by, under common control with, or controlling the center. The provisions of subsections (1) and (2) of this section do not apply to physical fitness service facilities that have been in operation for five years or more on the effective date of this Chapter.

(3) Each center is required to notify the administrator upon substantial change of its financial status and to submit an annual report.

(4) No person may offer physical fitness services in this State without first obtaining a certificate of authority from the administrator. A certificate of authority must be issued by the administrator upon submission of items (a) through (f) of this section. The applicant must submit:

(a) A formal application for the certificate in such form and detail as the administrator requires.

(b) A certified copy of its charter or articles of incorporation and its bylaws, if any.

(c) If a corporation, a certified copy of the certificate of authority or good standing certificate from the Secretary of State of South Carolina.

(d) A copy of its membership agreement.

(e) A copy of any contract to be issued.

(f) A list of outlets at which physical fitness services will be offered.

(g) Any other relevant information required by the administrator.

(5) No certificate of authority may be issued by the administrator until the center pays an initial certificate of authority fee of fifty dollars an outlet. Certificates of authority may be renewed upon payment of an annual renewal fee of fifty dollars an outlet on or before December thirty-first.

(6) A copy of the Certificate of Authority required by this chapter must be posted conspicuously at every location where monies or contracts are received by the center.

(7) It is unlawful for any center or person acting on behalf of a center required to obtain and maintain a Certificate of Authority under this chapter to advertise, sell, or offer to sell the use of physical fitness services when a valid certificate is not on file with the administrator.

(8) The administrator may order the center to cease and desist, or may revoke, suspend, or refuse to continue the certificate of authority of a center, whenever, after a hearing and for causes shown, he determines that the center has violated or failed to comply with any provisions of this chapter or regulations promulgated under the authority of this chapter, or if after notice and opportunity for a hearing, it is shown that:

(a) any document or declaration required by subsection (4), items (a) through (g) were false or misleading; or

(b) by clear and convincing evidence the center or its agents, officers, or employees have engaged in false, fraudulent, or deceptive conduct in its dealings with customers;

(9) In lieu of revocation, suspension, or refusal to continue a certificate of authority of a center, the administrator in his discretion may assess an administrative penalty for a violation of subsection (4) or (8) of this section not to exceed five hundred dollars for each violation, not to exceed five thousand dollars for matters commenced in any calendar year. These penalties may be assessed in connection with orders to cease and desist.

SECTION 44-79-90. Promulgation of regulations.

The administrator shall administer this chapter and may promulgate regulations, subject to the Administrative Procedures Act, necessary to carry out its provisions.

SECTION 44-79-100. Advertising disclosure requirements; providing of other information upon request.

(1) No center shall advertise physical fitness services which are not operating or available without clearly and conspicuously disclosing in the advertisement that such are not presently operating or available.

(2) No center shall advertise physical fitness services which are not operating or available in each and every outlet unless the advertisement clearly and conspicuously discloses the facilities or services which are not operating or available at each outlet.

(3) Substantiation for physical fitness services advertising claims, and information necessary to determine the amount of the bonds required by this chapter, must be provided upon request of a circuit solicitor, the Attorney General, or the Department of Consumer Affairs.

SECTION 44-79-110. Exemptions.

The State of South Carolina and its political subdivisions and any not-for-profit corporations are exempt from the terms of this chapter.

SECTION 44-79-120. Violations and penalties.

Any person who violates any provision of this chapter is guilty of a misdemeanor and upon conviction must be fined not less than five hundred dollars nor more than five thousand dollars or be imprisoned for no more than three years, or both.

A violation of any provision of this chapter is considered a violation of Section 39-5-20 of the South Carolina Unfair Trade Practices Act.