PIERRE, S.D. (KELO) — Did a for-profit fitness center in Pierre violate South Dakota’s ban against businesses telephoning people whose names are on the state’s do-not-call list?
That’s a big question the South Dakota Public Utilities Commission will try to answer Tuesday.
A lawyer for the commission’s staff said the Anytime Fitness franchise in Pierre has called people in the area offering prizes of $100 discounts on memberships.
A lawyer representing the company, whose officers are listed as Marc Schmaltz and Mike Schmaltz from the Madison, Wisconsin, area, says the calls didn’t violate the law.
Their lawyer, Kara Semmler of Pierre, previously was a lawyer for the regulatory commission. She asked the commission for a declaratory ruling after commission staff sent notice of the alleged violation.
Here’s Semmler’s explanation to the commission:
“At the corporate franchise level Anytime established a program whereby its members can gift friends and family a trial membership worth $100. To participate in the program, a member provides to Anytime the names and phone numbers of up to 10 friends and/or family,” she wrote. “Those 10 individuals are then contacted by Anytime via telephone and invited to make an appointment to redeem the gift trial membership worth $100.”
Semmler wants the commission to answer whether the Anytime gift-members calls are “telephone solicitation calls” as defined by the state law 49-31-1 (30).
An attorney for the commission’s staff, Kristen Edwards, argues the calls are violations. She said the commission’s office received complaints from at least four people whose names are on the do-not-call list and that Anytime Fitness hasn’t registered as a telephone solicitor.
“It is AF’s contention that it is merely making calls to schedule an appointment and offer a gift card for a trial membership. But the bottom line is, AF is contacting by telephone South Dakota residents to get them to become members,” Edwards wrote.
Edwards contends that South Dakota lawmakers closed a loophole in 2007.
“AF now attempts to mask its telephone solicitation calls by seeking to offer trial memberships and tours of its facilities. This is precisely the business practice the Legislature ended, Edwards wrote.
She added that if the Anytime Fitness interpretation “was accurate, every cable company in the country would circumvent the Do Not Call registry by offering a month free trial. Car dealerships could call without restriction to offer people free test drives of their new or used cars. This behavior is a perfect example of what the registry seeks to prevent.”
Semmler replied, “Anytime is not ‘seeking to take advantage of a loophole’ as Commission Staff characterized it. Anytime does not make phone calls to consumers out of any ill intent and has no desire to take advantage of anyone. Commission Staff mischaracterized the facts.”
Semmler said the $100 free gift can be used in one of two ways:
“The recipient of the gift has the option to use the gift card as a free 14 days membership. This includes a key card, a 60 minute meeting with one of the company’s trained fitness professionals, a reading on the company’s InBody system, which is a state of the art body scanner, and access to the company’s app,” Semmler wrote.
She continued: “The other option for a gift recipient is to utilize the $100 towards his/her first month, which comes with a free 60 minute meeting with a fitness professional, the InBody reading, free key card (valued at $49), free Heart Rate Belt (valued at $69) a free Virtual Coach, as well as access to the company’s heart rate system software which gives real time results during a workout and a post workout recap once the individual leaves.”
Edwards sees a broader problem. She wrote that “the practice in dispute is a practice that all other AF franchises are instructed to follow, leading Staff to believe the violations of this nature are numerous and widespread.”