Genesis Health Clubs fined $15K for unsolicited telemarketing calls

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TOPEKA — Genesis Health Clubs Management Inc. was fined $15,000 for violating the Kansas No-Call Act, the Attorney General’s office announced on Friday.

The Wichita-based company operates at least 55 clubs in Kansas, Iowa, Nebraska, Missouri, Colorado and Oklahoma, with 22 facilities in 13 cities in Kansas. The company is owned by Rodney Steven, a well-known Republican donor in the Kansas Legislature.

Attorney General Derek Schmidt began investigating after receiving complaints that the company was making unsolicited telemarketer calls to Kansans on the national Do-Not-Call Registry. The Kansas No-Call Act allows Kansas residents to register their phone numbers so they do not receive unsolicited telemarketing sales calls.

The Attorney General’s office issued a consent judgment on Friday, saying that the company agreed to pay a $15,000 fine in addition to ending the unsolicited telemarketing calls. According to the judgment, the company also invested in a system to make sure sales calls are in compliance with telemarketing laws and retrained staff. 

In the consent judgment, the Attorney General’s office agreed to not pursue similar charges for related violations of the Kansas Consumer Protection Act, as well as the federal Telephone Consumer Protection Act, as well as other state and federal laws. 

Steven and Genesis Health Clubs have pursued a proposed property tax exemption for fitness and health clubs, a proposal that emerged as part of a last-minute deal during the 2021 legislation session, even though it hadn’t passed either chamber. The effort failed when the Senate rejected the proposal in the final hours of the session.

Throughout the session, the company enlisted powerful lobbyists — including Former Kansas congresswoman Lynn Jenkins — to promote the idea that nonprofits were unfairly cutting into business.

Steven has been advocating for the tax exemption while delinquent on at least $549,000 in pre-coronavirus property taxes owed to Shawnee, Johnson and Douglas counties.

If adopted by the Legislature and signed by Gov. Laura Kelly, legislation pushed by Republican leadership in the Senate would enable Genesis Health Clubs owned by Steven to avoid an estimated $2.5 million annually in property taxes. Genesis Health Clubs’ gain would drop Johnson County property tax revenue by $1.1 million per year and clip Shawnee, Sedgwick and Riley counties for amounts ranging from $273,000 to $366,000 annually. 

Steven championed similar legislation in 2013 and 2014 designed to grant for-profit fitness club owners such as himself a property tax exemption. The bill passed the Senate, but failed 16-108 in the House when a Republican representative read off the list of senators who accepted campaign contributions from Steven.

Kansas Reflector is part of States Newsroom, a network of news outlets supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: Follow Kansas Reflector on Facebook and Twitter.

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