Current through Register Vol. 48, No. 9, September 27, 2024
A. Definitions
Definitions shall be those contained in the South Carolina
Physical Fitness Services Act ("the Act"), S.C. Code Ann. Section
44-79-20
et seq. and the following:
Cash price --The price at which goods or services are offered for
sale by the seller to cash buyers in the ordinary course of business, and may
include applicable sales tax and the cash price of accessories or related
services. The cash price stated by the seller to the buyer in the physical
fitness agreement is presumed to be the cash price. The term does not include
any finance charge.
Time price differential --The difference between the price paid
in installments (time-price) and the cash price. Discounts for the purpose of
inducing payment by a means other than the use of credit will be considered
finance charge. For example, a physical fitness services provider offers
contracts of $1,000.00 each. If the buyer pays cash, the price is $900.00, but
if the buyer pays for the contract with the physical fitness provider in
installments over time, the price is $1,000.00. The $100.00 difference is a
finance charge for those who buy the agreement on credit. This definition does
not apply to the use of a credit card.
B. Certificate of Authority and Financial
Responsibility
(1) All organizations wishing
to provide physical fitness services in this State must first obtain a
Certificate of Authority from the Administrator of the Department of Consumer
Affairs. Initial applications for the Certificate will be made on the form
prescribed by the Administrator and accompanied by a fee of $50 per
outlet.
(2) Certificates of
Authority expire on December 31. Renewal applications will be accepted November
1 through December 31 of each year. Renewal applications shall be made on a
form prescribed by the Administrator and accompanied by a renewal fee of $50
per outlet. If a complete renewal application is not postmarked on or before
December 31, the center shall be required to submit an initial application per
item (1) above.
(3) Issuance of a
Certificate of Authority does not indicate approval or acceptance of the terms
of any contract, agreement or other document submitted in support of the
application. No organization providing physical fitness services shall in any
way represent that its services, payment schedules or terms of membership are
approved by the State or any state agency.
(4)
(a)
Physical fitness centers presenting a surety bond or other evidence of
financial responsibility in accordance with Section
44-79-80
of the Act must do so in accordance with the following value schedule:
|
Members
|
Amount
|
|
1,500 or more
|
$50,000
|
|
1,000 to 1,499
|
$40,000
|
|
500 to 999
|
$30,000
|
|
100 to 499
|
$20,000
|
|
1 to 99
|
$10,000
|
(b) Any
variation from the value schedule must be approved by the Administrator or a
designee.
(5) Within 45
days of a membership or outlet increase that puts the physical fitness
center(s) into a new financial responsibility category, the physical fitness
center(s) must present financial responsibility in the new amount to the
Administrator. Failure to provide amended evidence of financial responsibility
as required by this subsection will be regarded as a violation of the
Act.
(6) Each physical fitness
center must notify the Administrator upon substantial change of its financial
status within ten business days after the occurrence of any of the following
events:
(a) the institution of a revocation,
suspension, or other proceeding against the center by a governmental authority
which is related to the center's physical fitness services in any
state;
(b) the institution of a
civil action against the center. The center shall advise the Administrator
within thirty days of the action being dismissed, settled or otherwise
resolved;
(c) the filing of
bankruptcy, reorganization, or receivership proceedings by or against the
center;
(d) the center's opening or
closing of a new physical fitness center or outlet within the State;
or
(e) felony indictments or
convictions involving breach of trust, moral turpitude, fraud, or dishonest
dealing.
C.
Recordkeeping
(1) All books, membership
contracts or agreements and records, and all other sources of information with
regard to the business of providing physical fitness services must at all
reasonable times be available for inspection by the Department of Consumer
Affairs for the purpose of assuring that the business is being transacted in
accordance with the law and applicable regulations. Failure to provide or allow
access to all books, membership contracts or agreements and records and all
other sources of information with regard to the business of providing physical
fitness services will be regarded as a violation of the Act.
(2) All centers must maintain a copy of all
agreements for physical fitness services for as long as such agreements are in
effect and for a period of one (1) year thereafter. Agreements for each
calendar year must be filed in alphabetical order by the consumer's last name.
If the physical fitness provider uses numerically sequenced agreements, the
agreements may be filed in numerical sequence instead of alphabetical
order.
(3) Records and account
systems maintained in whole or in part by electronic data processing may be
used in lieu of the books, files and records required by these regulations if
they contain equivalent information and such information is accessible to the
Department.
(4) On or before June
30 each year, physical fitness centers must submit to the Administrator an
annual report. The report shall be made under oath and shall be on a form
prescribed by the Administrator.
D. Agreements
(1) In the event an agreement includes a
time-price differential, the cash price must be listed on the agreement
separate from required Truth-in-Lending disclosures. A notice in substantially
the following form complies with this regulation:
You have agreed to: (check one)
() pay (name of physical fitness provider) the membership fee of
$______ now, which is the CASH PRICE, or
() pay to (name of physical fitness provider) the CASH PRICE in
installments plus a FINANCE CHARGE in accordance with the schedule in this
agreement.
(2) A contract
for physical fitness services may include an automatic renewal option. A
customer must select and initial the automatic renewal option at the time the
initial contract is executed. Automatic renewal will be on a month-to-month
basis. When the initial contract is near expiration, the center must send a
written reminder to the customer of the automatic renewal. Prices under an
automatic renewal may not change unless written notice is provided to the
customer between 30 and 60 days prior to the change in price. Automatic renewal
is an "opt-in" option. If the consumer fails to initial the opt-in provision,
the contract shall not automatically renew.
E. Advertisements
(1) All advertisements by a physical fitness
provider must contain the name and an office address of the entity, which must
conform to a name and address on record with the Department of Consumer
Affairs.
(2) All restrictions on
use of special offers for memberships must clearly and conspicuously be
disclosed in the advertisement. These restrictions include but are not limited
to the time and day usage as well as equipment or area restrictions.
Statutory Authority: 1976 Code Sections
44-79-10,
44-79-80,
44-79-90,
44-79-100,
and
44-79-120
