S.D. regulators rule fitness franchise broke state’s do-not-call law

Capitol News Bureau
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PIERRE, S.D. (KELO) – Anytime Fitness violated South Dakota’s law protecting people on the state’s do-not-call registry, the state Public Utilities Commission said Tuesday. 

The Pierre business used referrals from current customers to call people and offer gifts of 14-day free memberships worth $100. 

Several people told commission staff that Anytime Fitness continued to call after the business was told the people were on South Dakota’s do-not-call list. 

Kara Semmler, a former lawyer for the commission, and a company vice president said what Anytime Fitness had been doing wasn’t illegal under South Dakota law. 

“There was no intent to find the loophole,” Semmler said. “The purpose of the call is to offer the gift.” 

She added, “The gift is a gift and it can be used, no strings attached, no purchases necessary.” 

Kristen Edwards, a lawyer for the commission, said it was a violation. 

The commissioners agreed with Edwards. 

The international company has about 4,200 franchises around the world. Adam Crowley has worked for Anytime Fitness since 2011. He said the company hadn’t received a complaint about its membership gifts anywhere else. 

Using the gift card starts with a 60-minute meeting with an Anytime Fitness guide that Crowley said was necessary for liability insurance reasons. After the commission staff began looking into the Pierre franchise’s practice, the business discontinued the calls until it could get a declaratory ruling. 

Crowley said new memberships subsequently dropped 50 percent. He said there were people in the commission’s meeting room – meaning someone from the commission staff, because the room was otherwise empty but for a KELOLAND reporter — who had participated in the gift-card program in 2017 and became eligible again this year. 

Commission attorney Edwards seized on Crowley’s comment about lost traffic. 

“Fifty percent drop in membership – that’s pretty telling. That tells all we need to know right there. This was a sale. The goal was a sale. It apparently was working,” Edwards said. She later added, “This is an incredibly big deal.” 

When Semmler’s turn came again, she seemed to make light of some of Edwards’ comments. 

“Create a loophole, swallow the rule, gut the D-N-C — oh goodness!,” Semmler said, recoiling in her witness chair as if horrified. “This company is not a bad actor. They did not disregard the laws of South Dakota.” 

Crowley said Anytime Fitness doesn’t pursue people if they decide to stop coming: “We don’t badger you. We don’t heckle you. We don’t make you feel bad.” 

The commission’s chairman, Gary Hanson, quizzed the commission’s consumer-affairs director, Deb Gregg, about what people had been saying at the PUC booth during the State Fair earlier this month. 

“Can you tell us, did they ever complain about phone calls of this nature?” Hanson asked. Gregg replied: “They complain a lot about receiving unwanted phone calls. And I believe that if you – why we’re here today – if your friend says that it’s OK to call, it’s not OK to call.” 

Gregg said she was one of the people who received the membership offer from Anytime Fitness based on a friend’s recommendation. She said she told the friend to stop it. 

Hanson said his opinion was the calls violated the do-not-call law: “Making phone calls on the basis of ‘a friend said,’ I just, I just can’t grasp that.” 

Commissioner Chris Nelson had tough words too. 

“Unwanted telephone solicitation calls are a scourge in modern society,” he told Semmler and Crowley.  

Nelson said Anytime Fitness could develop other ways to get the free-trial offers out, such as mail or personal distribution, or registering as a telephone solicitor and phoning people who aren’t on the do-not-call list. 

“The fact of the matter is, when I as a – as a consumer, get that unwanted call, I don’t care if it’s coming from a  Caribbean island or coming from your shop here in Pierre, I don’t want it,” Nelson told them. 

Commissioner Kristie Fiegen agreed with Hanson and Nelson: “We as a commission have really made this our passion, and our vision, to help consumers.” 

Find more information about putting your number on the do-not-call list online.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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