Contact 16 (Indiana) Investigate Local Bullshido
I don't think this has been posted yet, but I might have missed it. Ongoing story - part one is here. Related video on story progresses.
Martial Arts Mess
WNDU-TV, 1st March 2006
Discipline, integrity, honesty; those are words that describe the martial arts philosophy.
However, three different South Bend families say they experienced the exact opposite after trying out a local martial arts company.
The families tell Contact 16 they were promised one thing, and got something entirely different, costing them thousands of dollars.
In an exclusive hidden camera Contact 16 investigation, we uncover a Martial Arts Mess.
With each karate move, children learn self-defense, respect and confidence when taking part in the martial arts.
However, for three sets of parents, they were exposed to a different side of the art of martial arts; something they didn't bargain for.
Initially, however, it was the prestige, the integrity of martial arts that attracted these parents to get their children involved.
"We wanted to see if he'd really be interested in it because I took it," says Bill Myers.
While Dennis Ralston says, "They had a program in their daycare and (my children) seemed to take somewhat of an interest in it."
Craig Lekarczyk said, "Martial arts is about integrity, character."
But after these parents signed their kids up for lessons, the Lekarczyk's, the Ralston's and the Myer's all say things went terribly wrong.
"You end up feeling as though you've been taken and you're a victim," explains Craig.
Bill describes his time in the martial arts, saying, "When I was in martial arts you never did anything like this. They were just so high pressure, its just terrible."
"I didn't expect to be ambushed like this," says Dennis.
Problems for the Lekarczyk family started two years ago, after Mishawaka's Champion Martial Arts offered them a free karate demonstration.
"I asked several times, I still have 30 days; I can cancel, 'yes', 'yes', 'yes', (they told us)," says Tami Lekarczyk.
The Myer's and Ralston's also say Champion promised them a similar deal, just a few months ago.
Ralston decided to enroll his children at Champion, but had a change of heart the next day.
"As soon as we did it, we kind of second guessed ourselves, basically because it was such a large amount of money and such a long commitment," says Dennis.
Even though Ralston wrote a certified letter to cancel, he was charged $4900 on his credit card.
The Myer's also tried to cancel their contract, only to find out they were charged $2800.
The Lekarczyk's wanted to cancel their contract, until they say the owner told him he would lose money on the deal.
"Hey, I'm caught up in this and if I'm going to pay $3500 bucks well I'm going to try it out," said Craig.
The Myer's and Ralston's never took classes and were charged thousands of dollars
So, they called Contact 16 to investigate.
"I mean, like this to have a school ran, where you just charge somebody and hey, if you want to take lessons if you don't, we got your money, see you later that's not the way schools are ran," says Bill.
"It just diminishes the integrity martial arts is out to promote and establish," says Craig.
With an undercover camera, Contact 16 went to University Park Mall, which is right across the street from Champion, to investigate.
It's there where the families say Champion made its sales pitch.
To understand Champion's sales pitch, Contact 16 confronted the business about our families' claims.
This is what they had to say, "Come in one day a week, that's what you can do, a 30 day pass, you can sign up, you can do a monthly finance thing, ok. When you do the finance thing, you have three days to cancel through them to do a different option."
Contact 16 then asked, "What if I pay in a lump sum, can I cancel?"
Champion responded, "No."
"Why Not," we asked.
Champion responds, "Because there's a no refund policy that you sign."
However, Contact 16 got a different story when we went undercover.
Find out if it was the same thing our families were told, as we continue our exclusive Contact 16 hidden camera investigation, Martial Arts Mess, Part Two and Part Three, on NewsCenter 16 at 11:00 PM.
Good story. I wish more local news organizations would jump on this story. I have tried to approach some local papers with this and they don't want to touch it. With the millions of dollars spent nationally on fraud, I thought there would be more interest.
Link (includes video)
Martial Arts Mess: Part Two
WNDU-TV, 2nd March 2006
Three different, South Bend families say they were told they would get a free 30 days at Mishawaka's Champion Martial Arts.
However, that's not what they say happened. Instead, they were charged thousands of dollars.
Contact 16 went uncover to investigate this Martial Arts Mess.
The Lekarczyk's, the Myer's, and the Ralston's agreed to sign a contract for their children to take karate lessons with the understanding they could cancel in 30 days at no cost.
However, the families say that didn't happen and ended up being charged thousands of dollars.
Armed with our hidden camera, Contact 16 went to University Park Mall, which is right across the street from Champion, to investigate.
Champion rents a kiosk from the mall, but its actual store is across the street from the mall.
It is there where the families say Champion made its sales pitch.
When we asked Champion about its services, Contact 16 was told right away, "We do give away a free 30 days."
To get our free 30 days, Champion told us to make an appointment for our first lesson.
After the lesson, Champion filled out a finance contract, never mentioning the free 30 days until Contact 16 asked, "Ok, so if he changes his mind, do we have that 30 days to cancel?"
Champion responded, "You have three days to cancel."
Contact 16 then asked to clarify, "Three days to cancel?"
Champion said, "Yes."
However, that's not what Champion told us the first time at the mall.
"We do give away a free 30 days," Champion said initially.
That statement was also told to the Lekarczyk's, Myer's and Ralston's.
During our Contact 16 investigation, we also discovered dozens of complaints about Champion's cancellation policy registered with the Better Business Bureau, resulting in an unsatisfactory record.
We also found that two other Michiana families sued Champion because they say they were promised 30 days to cancel and also receive a refund.
Champion paid the claim in one case. The other case against Champion is still pending.
In Part Three of our Contact 16 investigation, you won't believe what happened when we went back to cancel.
You'll also hear from a local consumer attorney who says Champion may be breaking the law.
Martial Arts Mess: Part Three
WNDU-TV, 2nd March 2006
Three South Bend families say free karate lessons ended up costing them thousands of dollars.
That's where Contact 16 came in and you won't believe what we found when we went to Champion Martial Arts undercover.
Plus, we attempt to get Champion's side of the story, as we conclude our exclusive hidden camera Contact 16 investigation Martial Arts Mess.
Ambushed: that's how the Lekarczyk's, Myer's and Ralston's say they felt after giving thousands of dollars to Champion Martial Arts, with a promise they could cancel the contract within 30 days and get a refund.
Contact 16 went undercover to investigate and got a similar sales pitch at University Park Mall.
Champion told Contact 16, "We do give away a free 30 days."
After our free lesson, Champion signed us up and said, "You have three days to cancel."
The very next day, Contact 16 went back with our hidden camera, hand delivering our cancellation letter.
Champion told us, "That contract is not good anymore. There's a no refund policy."
We found out later that its "no refund policy" is written on a personal analysis form, clearly not a contract, and again, not what we were told initially.
South Bend Attorney Stephen Drendall has experience handling consumer cases.
We showed him what happened to us and our other families. "It looks to me like there is misleading going on," he said.
Drendall says Champion may be even breaking the law.
The Indiana Health Spa Services Act says you have three business days to cancel a membership, regardless of how you pay.
Contact 16 asked Drendall, "They say 'sorry, since you made a lump sum to us and didn't go through a third party, we're not obligated by that three day period'?"
Drendall responded, "No they can't say that under the law."
Is Champion using the method of payment in an attempt to circumvent the law?
"The contract was for $4,000. You guys didn't pay that; you paid one payment of $3200, that's a monthly reoccurring bill. That's not good anymore because they're not collecting our money for us," said Phil with Champion.
We contacted the Indiana Attorney's General's office to get clarification on this issue.
"If you look at the act, there's no reference to manner of payment with respect to the right to cancel. The right to cancel is absolute in that type of transaction," explained Dave Paetzman with the Indiana Attorney General's office. "For whatever reason, they feel it's appropriate in their business to not refund the money, despite the terms of the contract and that's something we're taking a very close look at."
The Indiana Attorney General's office tells Contact 16 they are investigating Champion.
We wanted to know if other martial arts facilities do business this way.
We called all of the faculties in the yellow pages, including Sponseller's Taekwondo.
Most charge a month-to-month fee for lessons, not like a one lump sum that Champion charged our three families.
Jerry Sponseller of Sponseller's Taekwondo said, "If something happens or if they have a problem they relocate or lose interest."
Contact 16 confronted Champion and asked why it gave us three different refund policies.
First, we were told we had a free 30 days, then three days to cancel, to a no refund policy.
"I don't know, you'll have to talk to the attorney," said Champion.
So, we faxed Champion's attorney a list of questions and received an email stating, "Upon further consideration, we will not be responding to the questions."
Contact 16 also showed up at Champion's court appearance where they are being sued. They told us, "No comment, no comment."
To avoid situations such as this...
Contact 16 will keep you posted on any new developments that the Indiana Attorney General's office may have.
It's important to note, the Ralston's were the only family to cancel their contract in writing within three business days.
The other families only cancelled verbally and are suing Champion to get their money back.
Meantime, our credit card company stopped payment to Champion once we faxed the contract showing the three-day cancellation policy.
The lesson for you at home: if you sign up at a health or fitness club, Contact 16 strongly recommends you read the contract completely. You do have the right to add provisions to the contract before you sign.
If at all possible, pay with a credit card. That way, you can dispute it.
If you do cancel, it's key you put that in writing and send it certified.
What a great story, we at Bullshido should give out media awards for coverage like this.
I Put it up in the admin section SAM.
hi, you may or may not believe me but i went to this karate school, which is now closed, all the memberships were sold to a more popular school, inmans, for 1 dollar by john stowe. i'm 14, and the story goes like this. after the whole incident with wndu 16 stowe's buisness went to hell, along with any of our paychecks. including the main instructor's and of course my own. little does anyone besides the staff and students at champ martial arts is that stowe was opening up a school down in bloomington. what was to happen was 1 instructor and his younger brother were to run the school in mishwaka, while one of the other instrcutors ran the school down in indy with stowe. things went, in a manner of speaking, well for sometime. but then the main insturctor and his younger brother quit (which i latered discovered was because stowe wasn't paying them!) leaving the school to be run by a 16 year old who went to penn, with the instructor in indy coming down weds and thurs for XMA classes. after the two instructors left i decided that the lessons were turning to **** under the 16 year old's watch, and i decided to take a break to let things work themselves out. that was in november. just 2 days ago, my brother, 19, who was visiting from college saw the younger brother of the instuctor at the mall, and thats how i found out about stowe :). good on him though, he was a real jerk. inman decided to let any of stowe's members in free, but as we all know with karate theres always graduation costs, gear costs, uniform costs that sort of ****, so it'll add up. the younger brother invited me back, so the question is, do i go? :qfrog:
Who controled Championship Martial Art's lawyer? What was their name and position with this school?
As a fourteen year old, what were you getting paid for?
well the idea of theirs was for me to start training to be an instructor in the future, but it was mostly cleaning **** :) and also i have no idea what your first question is supposed to mean
The lawyer was representing whoever was controlling the billing at Champions. So the question becomes, was the 16 year old making contract decisions, or was legal advice being given to someone higher up who then decided what to do, re refunds.
The TV station does not specify who it was talking to concerning sales and refunds.
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