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Conversations With Potential Customers Are Bugged

May 13, 1987

AKRON, Ohio (AP) _ Employees of Scandinavian Health Spas sometimes eavesdrop electronically on potential customers’ conversations, but Ohio officials say the practice doesn’t violate state law.

The company’s sales tactics and collection methods have generated numerous complaints in the past, according to the state officials. Since March 1986, the state attorney general’s office has received more than 750 complaints about the clubs, a spokewoman said.

Scandinavian President Frank Leonesio confirmed last week that his company has eavesdropped on conversations for 15 years, but he said it is not a routine practice. He said it is done only to make sure employees follow procedures and that he sees nothing unethical in the practice.

All rooms at Scandinavian Health Spas have signs indicating that someone may be listening in, Leonesio said.

″Of course they’re bugged,″ Kimberly Hagelberg, who used to work at a Scandinavian spa in the Akron area, said in a recent interview. ″ ... You could go in and listen in on any room you wanted to.″

Scandinavian, a subsidiary of the giant Bally conglomerate, is based in Akron. Besides the spas it operates in the Ohio cities of Akron, Canton, Cleveland, Cincinnati, Columbus and Youngstown, the firm operates spas in Florida, Minnesota, Colorado, Indiana, Pennsylvania and Michigan.

In March 1986, in a negotiated settlement stemming from a variety of charges by the Ohio attorney general’s office, the health club agreed to pay fines totaling $30,000 and follow a number of new operating procedures. The state had received 200 complaints about the company’s sales tactics and collection methods.

Since then, the state has received more than 750 additional complaints about the club, said Melinda Swan, a spokeswoman for Attorney General Anthony J. Celebrezze Jr. About 70 percent of those have been resolved; unresolved complaints eventually will go to arbitration, she said in a recent interview.

Celebrezze’s office said it is aware of the bugging but that it doesn’t violate state law. That’s why no mention of electronic listening was involved in last year’s settlement.

Edward Katz, president of the Akron office of the Better Business Bureau, said the bugging of sales rooms undoubtedly would be an unethical practice. Katz said his office has received complaints about bugging at Scandinavian spas but has not investigated them because of lack of staff.

Most of the consumer complaints about Scandinavian deal with high-pressure sales tactics. Katz said the Akron bureau has referred between 40 and 60 such complaints to the Ohio attorney general during the past year.

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