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Membership Contracts: How to Properly Respond to Formal Complaints

A written billing agreement ― otherwise known as a membership contact — is a standard business document used by many membership-based businesses. Every day, Martial Arts schools, fitness clubs, yoga and Pilates studios, and MMA gyms establish agreements with their members. The membership business offers classes, lessons, equipment, and/or training in exchange for payment from the member. Through the membership contract, the member agrees to use services provided by the business and pay for them at an agreed price under certain terms and conditions.

Sounds clear-cut, right? Unfortunately issues surrounding membership contracts arise, and those issues can be anything but clear-cut. Members often times end up opposing the terms of the signed billing agreement, stating “that is not what I was told when I joined“. These complaints turn into a ‘contract dispute’ and can then escalate to a formal consumer complaint filed through the Better Business Bureau (BBB) and/or the State Attorney General.

Formal complaints issued through the BBB and/or State Attorney General aren’t to be taken lightly. Here are some tips you should consider before responding to these complaints:

  1. Make sure you fully understand the complaint before you respond. Angry customers tend to throw everything they can into a formal complaint in order to prove their case. Before you formulate your response, find the customer’s proposed resolution. Once you know of the requested resolution, you can better address the complaint.
  2. Keep your personal feelings out of it. Your anger or disappointment has no place in a formal response letter. Many local BBBs post responses online for others to review. State the facts only.
  3. Back up your responses with any documentation you may have, i.e. a written billing agreement, cancellation form, etc. Be sure to black out any bank account or credit card numbers if they are included on your documentation.
  4. Keep copies of the complaint and your responses. If the issue is not resolved with the first correspondence, you may receive a rebuttal complaint. Having a copy of the first letter helps in responding to the second letter.
  5. If you do not agree with the customer’s suggested resolution, offer an alternative. This displays your willingness to compromise and end the dispute on amicable terms.
  6. Whether the consumer complaint is filed with the BBB or the State Attorney General, it is very important to respond by the suggested deadline date. This is especially true of Attorney General complaints. The Attorney General has the power to investigate further and can prosecute if it finds wrong-doing. Your best bet with Attorney General disputes is to find a way to resolve them as quickly as possible.

As I’ve mentioned before, your ability to resolve the conflict and complaint is an extremely important part of keeping your membership business successful and your business reputation protected. Often times it is best to find a resolution that works for both parties.

For additional guidance, read my post on how to properly handle member cancellations.

Margo Stauffer is the Director of Customer Service for Member Solutions. She manages the Customer Service and Client Services Teams. Over the years, she has managed customer service teams in several industries including eight years in the health and fitness area serving franchisees throughout the world. She has been with Member Solutions for nearly five years.

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