📋 Overview

Your gym has received a claim alleging unauthorized charges - typically charges that continued after the member attempted to cancel, or charges the member claims they never authorized. These claims are increasingly common and can escalate to chargebacks, regulatory complaints, or class actions if not handled properly.

⚠ Post-Cancellation Charges

The most common claim: member says they canceled but charges continued. Document when and how cancellation was requested.

💳 Chargeback Risk

Members often file chargebacks for disputed charges. Too many chargebacks can risk your merchant account.

💰 Pattern Exposure

If multiple members have similar complaints, you face potential class action or AG investigation.

Common Unauthorized Charge Allegations

  • Post-cancellation billing - Charges continued after member submitted cancellation
  • Cancellation barriers - Member couldn't cancel due to unreasonable requirements
  • Undisclosed fees - Annual fees, rate increases, or other charges not clearly disclosed
  • Free trial conversion - Charged after trial without proper notification
  • Frozen account charges - Billed during claimed freeze period
  • COVID-related - Charged during facility closure periods

Our Pricing

  • 📄 Demand letter: Flat fee $450
  • ⏱ Extended negotiation: $240/hr
  • 📊 Contingency: 33-40% for strong claims
$450
Attorney Response on Letterhead

Document review, compliance assessment, professional response, and chargeback defense strategy.

Schedule Review

🔍 Evaluate the Claim

Determine whether the charges were actually authorized and whether your cancellation process complies with California law.

Authorization & Cancellation Analysis

Issue Your Position is Strong If... Your Position is Weak If...
Cancellation request No request in your records Request exists, wasn't processed
Cancellation method Member didn't follow disclosed procedure Procedure unreasonable (e.g., in-person only)
Notice period Charges were during contractual notice period Charges continued past notice period
Facility usage Member continued using gym No usage during disputed period
Fee disclosure All fees clearly in contract Fees not mentioned or hidden

📄 Authorization Records

  • ✓Signed membership agreement
  • ✓Payment authorization form
  • ✓Auto-renewal consent record
  • ✓Fee schedule acknowledgment

📝 Cancellation Records

  • ✓All cancellation requests received
  • ✓Processing dates and actions taken
  • ✓Confirmation sent to member
  • ✓Final charge date after cancellation

⚠ The California Cancellation Rule

Under California's Automatic Renewal Law (BPC 17602), cancellation must be "at least as easy" as signup. If members signed up online but you require in-person, phone, or certified mail cancellation, you likely violate this law - making all post-signup charges potentially unauthorized regardless of what your contract says.

🛡 Your Defenses

Strong defenses against unauthorized charge claims require documentation and compliance with California law.

Valid Authorization on File

If you have a signed membership agreement and payment authorization form with clear billing terms, you can show the member consented to all charges made under those terms.

When to use: You have signed documents authorizing the specific charges at issue.

No Cancellation Request Received

If your records show no cancellation request from this member, and your cancellation procedure was clearly communicated, the member remained bound by their agreement.

When to use: Member claims they canceled but you have no record of any cancellation attempt.

Charges Within Notice Period

If your contract requires 30-day cancellation notice and you have that request, charges during the notice period were authorized under the agreement.

When to use: Disputed charges occurred during contractual notice period after valid cancellation request.

Continued Facility Usage

Check-in records showing the member continued using the gym after their claimed cancellation date undermines their claim the charges were unauthorized.

When to use: Access logs show gym visits during the period of disputed charges.

Improper Cancellation Method

If your cancellation procedure was clearly disclosed and reasonable, and the member didn't follow it (e.g., just stopped coming without notice), charges continued lawfully.

When to use: Member didn't follow disclosed cancellation procedure - but BE CAREFUL this defense only works if your procedure complies with ARL.

🚨 Defenses That Usually Fail

  • "Contract says in-person cancellation required" - violates ARL if online signup
  • "Member didn't call during business hours" - unreasonable barrier
  • "Certified mail only" - unreasonable for gym membership
  • "We didn't receive their email" - your system failure isn't their problem
  • "Contract auto-renewed" - if renewal disclosure was inadequate

⚖ Response Options

Choose your response strategy based on your documentation and compliance posture.

Full Refund & Process Fix

If your cancellation process doesn't comply with ARL or you can't document proper authorization, refund in full and fix your systems immediately.

  • Prevents escalation
  • Avoids chargeback fees
  • Stops regulatory risk

Deny with Documentation

If you have solid documentation (signed contract, no cancellation request, compliant process), provide detailed evidence showing charges were authorized.

  • Preserves revenue
  • Creates defense record
  • Appropriate if compliant

Partial Refund Compromise

Refund charges from the date member first complained/attempted cancellation forward, while maintaining earlier charges were valid.

  • Shows good faith
  • Limits total exposure
  • Often accepted

Accept Chargeback

If documentation is weak and amount is small, accepting a chargeback may be cheaper than fighting. But watch your chargeback ratio.

  • Quick resolution
  • Avoids legal fees
  • Risk: sets precedent

📊 Chargeback vs. Refund Analysis

Consider all costs when deciding response

Disputed charge amount$50-500
Chargeback fee (if filed)$25-100
Staff time to fight chargeback2-4 hours
Risk to merchant account (if lose)Significant
Proactive refund costDisputed amount only
PROACTIVE REFUND OFTEN CHEAPER+Preserves relationship

💡 Chargeback Ratio Warning

Credit card processors monitor your chargeback ratio. Too many chargebacks (typically over 1% of transactions) can result in higher processing fees, reserve requirements, or account termination. Sometimes refunding proactively is better than winning chargebacks.

📝 Sample Responses

Customize these templates for your specific situation.

Full Refund - Cancellation Process Issue
Dear [MEMBER NAME], Thank you for contacting us regarding charges to your account at [GYM NAME]. We have reviewed your account and confirmed that you requested to cancel your membership on [DATE]. We apologize that charges continued after this date. We are processing a full refund of [$AMOUNT] for all charges from [DATE] to present. This refund will appear on your payment method within 7-10 business days. Your membership is now canceled and your payment information has been removed from our system. You will not receive any future charges. We have updated our cancellation process to ensure this doesn't happen to other members. We apologize for any inconvenience this caused. Sincerely, [GYM MANAGER NAME]
Denying Claim - No Cancellation on File
Dear [MEMBER NAME], We have reviewed your claim regarding charges to your [GYM NAME] membership. Our records indicate: 1. You signed a membership agreement on [DATE] authorizing monthly charges of [$AMOUNT]. 2. Our cancellation policy, disclosed in your agreement and posted at our facility, states: "[Quote cancellation procedure]" 3. We have no record of receiving a cancellation request from you prior to your message on [DATE]. We searched our email system, phone logs, and front desk records. 4. Our check-in records show you accessed the facility [X] times in the past [X] months, most recently on [DATE]. Based on these records, all charges to your account were authorized under your valid membership agreement. We respectfully decline your refund request. However, your membership is now canceled effective [DATE] per your recent request. You will not be charged after this date. If you have documentation of a prior cancellation attempt, please provide it and we will investigate further. Sincerely, [GYM MANAGER NAME]
Partial Refund - Notice Period Applied
Dear [MEMBER NAME], Thank you for contacting us regarding your membership charges. We located your cancellation request dated [DATE]. Per your membership agreement, a 30-day notice period applies to cancellations. This means your final authorized charge was on [DATE]. We acknowledge that [X] charges totaling [$AMOUNT] occurred after your notice period ended. We are refunding these charges in full. The refund will appear within 7-10 business days. The charges during your 30-day notice period ([$AMOUNT]) were authorized under your agreement and will not be refunded. Your membership is canceled and no future charges will occur. We apologize for the billing that occurred beyond your notice period and have taken steps to prevent this from happening in the future. Sincerely, [GYM MANAGER NAME]
Chargeback Response Letter
RE: Chargeback Dispute - [MEMBER NAME] - [TRANSACTION ID] To the Chargeback Department: We dispute this chargeback and provide the following documentation: 1. SIGNED MEMBERSHIP AGREEMENT (attached) - Dated [DATE], signed by cardholder, authorizing recurring monthly charges of [$AMOUNT]. 2. PAYMENT AUTHORIZATION (attached) - Cardholder authorized automatic billing to the card ending in [XXXX]. 3. CANCELLATION POLICY - Our policy requires [describe procedure]. This was disclosed in the agreement and acknowledged by cardholder. 4. NO CANCELLATION REQUEST - We have no record of a cancellation request from this member prior to [DATE]. Search included: email, phone logs, front desk records. 5. FACILITY USAGE - Check-in records (attached) show member accessed the facility [X] times during the disputed billing period. 6. TRANSACTION RECORDS - All disputed charges were processed in accordance with the signed authorization. The cardholder received the services they agreed to pay for and did not cancel their membership prior to these charges. We request this chargeback be reversed. [GYM NAME] [CONTACT INFORMATION]

🚀 Next Steps

Actions to take after receiving an unauthorized charge claim.

Step 1: Find All Records

Pull signed agreement, payment authorization, billing history, cancellation requests, communications, and check-in logs.

Step 2: Timeline Analysis

Create timeline: signup date, all charges, any cancellation attempts, last facility usage.

Step 3: Compliance Check

Does your cancellation process comply with California ARL? This determines your defense strength.

Step 4: Respond Promptly

Respond within 14 days. If chargeback pending, respond within processor's deadline.

Process Improvements to Prevent Future Claims

  • Online cancellation: If members can sign up online, offer online cancellation option
  • Cancellation confirmation: Send immediate written confirmation of all cancellation requests
  • Stop billing immediately: Process cancellations promptly, don't wait for notice period to log it
  • Clear disclosures: Ensure all fees and notice periods are clearly disclosed at signup
  • Record keeping: Document all cancellation requests with timestamps

Get Professional Help

Unauthorized charge claims can escalate quickly. Get professional assistance to respond effectively and protect your merchant account.

Schedule Consultation - $450

California Resources

  • Automatic Renewal Law: Business & Professions Code 17600-17606
  • Health Studio Act: Civil Code 1812.80-1812.98
  • CLRA: Civil Code 1750-1784
  • Chargeback rules: Visa/Mastercard merchant agreements
📝 Need to write this type of letter? See our Demand Letter Guide →