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[Utah Administrative Code Table of Contents]
[Title R152. Table of Contents]
R152-7-1 Authority.
These Rules are promulgated in accordance with the provisions of Section 63-46a-3 and Section 13-2-5 , Utah Code Ann. (1953), as amended, to prescribe for the administration of the Utah Health Spa Act, Section 13-23-1 , et seq., Utah Code Ann. (1953), as amended, the "Act".
R152-7-2 Scope and Applicability.
These rules shall apply to the conduct of every Health Spa Business within the State of Utah.
R152-7-3 Definitions.
A. "Advance Sales," shall mean sales of membership contracts on any date prior to the date a health spa facility shall be open and available to provide services to purchasers.
B. "Bond", "Letter of Credit", or "Certificate of Deposit" shall mean an instrument containing a promise from a third party to pay to the Division of Consumer Protection for the benefit of purchasers of membership contracts the dollar value of the unused portion of such purchaser's membership in the event the health spa facility shall be unable to or refuse to provide health services pursuant to such Membership Contract.
C. "Costs" shall mean those costs incurred by the Division in investigating complaints, administering rescission of membership contracts or fulfilling its responsibilities under the Utah Health Spa Act or Rules promulgated thereunder.
D. "Department" shall mean the Department of Commerce of the State of Utah.
E. "Division" shall mean the Division of Consumer Protection of the Department of Commerce of the State of Utah.
F. "Health Spa Business" shall mean the business of buying, operating and selling health spa facilities and shall include all acts related thereto.
G. "Health Spa Facility" shall mean the physical facilities at which the services of a health spa business are provided to its members.
H. "Member" shall mean the purchaser of a Membership contract pursuant to which the member anticipates receipt of health spa services in exchange for consideration given by such purchaser.
I. "Membership Contract" shall mean a legally binding obligation pursuant to which a purchaser agrees to give consideration in exchange for membership privileges which the seller shall be obligated to provide.
J. "Rescission" shall mean the process of canceling a membership contract and refunding to the purchaser thereof the dollar value of the consideration paid for services which have not been provided as of the date of cancellation.
R152-7-4 Registration Requirements and Contracts for Health Spa Services.
A. Prior to selling or attempting to sell a Membership Contract, a health spa facility must file the following documentation with the Division:
1. A completed application on the form prescribed and furnished by the Division which shall include:
a. Name, addresses, and telephone numbers of owner(s) of the Health Spa Facility and the facility address, telephone number, and name of contact person at the facility.
b. A check or money order for a $100 non-refundable application fee.
c. A current pricing structure for membership services.
d. A copy of the contract(s) utilized by the facility containing the language required by the Act.
e. The original or certified copy of the surety bond, letter of credit, or certificate of deposit in the required amount or, if applicable, the information set out in the application as the basis for a claim of exemption from registration.
f. The number of membership contracts with the facility which have outstanding, unexpired terms.
g. The number of existing membership contracts which required down payments, enrollment fees, membership fees or any other payments to the facility.
h. The number of existing lifetime memberships.
i. Other information and documentation as set out in the application.
2. Notice of intent to sell memberships.
B. Each Membership Contract shall contain a provision, printed in all capital letters which reads substantially as follows: "IN THE EVENT THE HEALTH SPA FACILITY CLOSES AND ANOTHER HEALTH SPA FACILITY OPERATED BY THE SELLER, OR ASSIGNS OF THE SELLER, OF THIS CONTRACT IS NOT AVAILABLE WITHIN A TEN (10) MILE RADIUS OF THE LOCATION THE MEMBER INTENDS TO PATRONIZE, SELLER WILL REFUND TO MEMBER A PRORATA SHARE OF THE MEMBERSHIP COST, BASED UPON THE UNUSED MEMBERSHIP TIME REMAINING ACCORDING TO THE CONTRACT."
C. All Membership Contracts shall specify what items of equipment or services provided by the health spa facility on the date of the execution of the membership contract are subject to deletion or change at the discretion of the facility.
D. All Membership Contracts sold prior to opening of the health spa facility shall allow the buyer a three (3) day right of rescission in accordance with Section 13-23-4 of the Act, or Section 13-11-4 (m) of the Utah Consumer Sales Practices Act.
E. The dollar value of a Membership Contract shall be clearly stated on the face of the contract.
F. In any event, no Membership Contract shall be sold which provides a membership term of longer than thirty-six (36) months.
G. The purchaser of a Health Spa Facility shall replace the Seller as a party to any unexpired Membership Contract and shall honor all Membership Contracts of the purchased facility in effect at the time of purchase, pursuant to Section 13-23-5 (2) of the Act. In the event a Health Spa Facility shall be sold under circumstances which will result in its closure and the purchaser shall not operate a Health Spa Facility within 10 miles thereof, purchaser must notify Members of such closure in writing within 10 days of the date of sale. Members may cancel their outstanding Membership Contracts or may choose to continue their Membership Contract in force. Notice of such election shall be in writing mailed to the purchaser within 30 days of the receipt of notice of closure of the acquired Health Spa Facility.
H. A separate registration shall be required for each separate location maintained by a health spa business.
R152-7-5 Rescission.
A. In the event a Health Spa Facility shall, for any reason, close, discontinue normal operations or otherwise cease to do business while having outstanding obligations to provide membership services to members holding valid membership contracts, the Health Spa Facility must offer, in writing, to rescind all such membership contracts and to refund the unused portion of all Member's membership fees. Such written offer of rescission shall establish the procedure and time limit for acceptance of the rescission offer and obtaining the desired refund.
B. An offer of rescission shall be made to each purchaser whose Membership Contract is valid on the last day the Health Spa Facility is open for business. The Health Spa Facility shall provide the Division with a list of Membership Contracts valid on the date of closure within 10 business days of such closure.
C. Money to be refunded to members upon closure of a Health Spa Facility under these Rules shall be placed in escrow with a bank or other financial institution previously approved by the Division. Such funds shall come from a Bond, Letter of Credit, or Certificate of Deposit payable to the Division.
D. Refunds shall be made to Members who submit claims within a time period to be prescribed by the Division. Such refunds shall be made under the supervision of the Division and shall, if insufficient funds are available for full refund, be made on a prorata basis based upon the full amount due a claimant. The amount due shall be determined by multiplying the number of months remaining on claimant's membership term as of the date of closure by the monthly cost of such membership to the member at the time of purchase. Periods of less than a full month shall be compensated by determining a daily cost of membership and multiplying such daily cost by the number of unused membership days in such period.
E. Refunds shall be made to claimants within 90 days following the final date for submission of claims in accordance with the procedures specified above.
F. The Division may recover from the funds deposited in escrow pursuant to this Rule, its costs, including investigative costs, processing costs, attorneys fees and other expenses related to administration of rescissions made under these rules.
G. In the event there shall be funds remaining after full refund to all claimants and payment of costs of the Division, such excess shall be returned to Owners of the Health Spa Facility.
R152-7-6 Bond, Letter of Credit, or Certificate of Deposit Required.
A. Except as provided in Section 13-23-6 , of the Act, all Health Spa Facilities shall be covered by a performance Bond, Letter of Credit, or Certificate of Deposit payable to the Division in an amount to be determined by the number and cost of membership contracts sold by the Health Spa Facility.
B. Originals or certified copies of such Bonds, Letters of Credit, or Certificates of Deposit shall be provided to the Division not less than 10 days in advance of the first sale or attempt to sell made by any Health Spa Facility. Annual renewals of such Bonds, Letters of Credit, or Certificates of Deposit shall be filed with the Division at least 30 days in advance of expiration of existing Bonds, Letters of Credit, or Certificates of Deposit.
C. The Division shall have the right to approve or reject Bonds, Letters of Credit, or Certificates of Deposit submitted in compliance with this Rule. In the event a Bond, Letter of Credit, or Certificate of Deposit is rejected by the Division, the Health Spa Facility shall submit another within 15 days following notice by the Division. In no event shall a Health Spa Facility conduct business without a Bond, Letter of Credit, or Certificate of Deposit in effect.
D. A Health Spa Facility which allows Bonds, Letters of Credit, or Certificates of Deposit to expire without filing renewal as provided herein, may be allowed, at the discretion of the Division, to register as a new Health Spa Facility pursuant to the provisions of R152-7-4 and R152-7-6, hereof.
R152-7-7 Enforcement.
A. The Division may be entitled to recover costs, including investigative costs, processing costs, attorneys fees and other costs incurred in administration of these rules. Upon election of the parties, payment of such costs shall be made from the proceeds of the Bond, Letter of Credit, or Certificate of Deposit.
B. Any payment made to the Division shall be approved by the Executive Director of the Department of Commerce.
[Indexing]
KEY: consumer protection, health spas
August 14, 1995
[Editor's note: Below are references
to the Utah Code that are listed by the
agency making this rule as authority
for the rule.]
63-46a-3
13-2-5
13-23-1
Notice of Continuation November 25, 1997
