Return to site

The Head-Spinning Explanation Regus Gave For A $50/Month 'Maintenance Fee' Buried In The Fine Print

"Because we are not your bank"

· Regus,Fine Print,Maintenance Fee,Dallas,Texas

Many Regus customers have never seen the so-called "House Rules" document that Regus says is part of every customer contract. This is not by accident.

Court records from a 2012-2016 class-action lawsuit that customers from California and New York filed against Regus go into considerable detail on what Regus systemically trains Regus salespeople to do, say, and show when trying to get someone to sign a new Regus contract. Of particular note were the allegations that... 

  • "The House Rules are a five-page document which is available to, but not normally given to customers."
  • "Regus's goal is for clients not to review the Terms & Conditions." (In support of this allegation, the plaintiffs' cited some of Regus's sales training documents that were uncovered during discvoery--the 
  • Regus SmartSelling training
  •  document, in particular.)
  • "The House Rules were generally not provided to customers prior to, or at the time of, execution of the Office Agreement." 

Perhaps realizing the potential hazards of exposing to the general public the evidence that plaintiffs found in this lawsuit, the evidence on which the plaintiffs' based these claims that Regus intentionally tries to conceal entire parts of its standard customer contracts, Regus asked the court to seal those records--which the court obliged. So, we're left with merely the conclusions that the plaintiffs in that case drew from their review of those records. Even so, a 5-minute survey of Regus customer reviews at most Regus locations around the world will provide some clue as to whether Regus does in fact try to conceal entire parts of its contract from customers or not.

broken image

A primary recurring theme in many of those customer reviews is that Regus somehow managed to conceal from the customer some material caveat that ended up costing the customer more money than the customer realized they were under contract to owe. The $50/month maintnenance fee is a great example.

Buried in the fine print

The only mention of the maintenance fee anywhere in the contract occurrs in section 51 of the House Rules document (specifically, this is the August 2020 version of the House Rules, as other versions may shuffle the provision to a different numbered section).

broken image

The first issue to point out, then, is that, if the maintenance fee is only mentioned in the house rules, and Regus salespeople routinely fail to provide prospective customers with a copy of the house rules before they sign the contract, then it would be impossible for those customers to have known about the maintenance fee. We might reasonably infer that this is what happened to former Regus customer Sabine Wimmer. Even though, as a long-time executive assistant, she is well practiced at reviewing documents in full and taking notice of everything contained in the fine print, if Regus simply concealed the house rules document from her, then her typical attention to detail would not have led her to discover the maintenance fee at the outset.

"Questionable practice"

The second issue to point out, as Sabine noted in her review above, is that, included in the terms and conditions or not, many people might consider this to be a "questionable practice" in any case. In other words, what exactly is the justification for charging a $50/month maintenance fee?

As Sabine recounted, the justificaton Sabine was given when she discussed the maintenance fee with a Regus employee was that Regus is "not your bank." The subtext of that explanation seems to be that Regus considers the $50/month maintenance fee to be some sort of cost recovery fee given the expense Regus incurs when it holds onto your money. Even on its face, though, this is, of course, an absurd position. Here are a few reasons why.

First, even if Regus were incurring net costs by holding onto people's money--rather incurring a net benefit, which is more likely--what are the chances that those costs come anywhere close to $50/month on average per account? This does not seem likely at all, or course. So, instead, even if we look only at the numbers involved, and ignore all of the potential funny business with hiding parts of the contract and so forth, the $50/month maintenance seems to be nothing more than a sneaky "profit center" for Regus, a way for Regus to keep collecting fees from people even after they're no longer Regus customers.

Although it's not the same context, note that maintenance fees of this sort have long been targeted by state legislators as unfair and deceptive trade practices when retailers charge undisclosed maintenance fees on "dormant" gift cards--or even just maintenance fees at all (example: NC Gen Stat § 66-67.5 (2015)).

Is it unfair and deceptive?

To determine whether Regus's practice of charging this $50/month maintenance fee rises to the level of unfair and deceptive, we might consider several factors at once. One regards disclosure of the fee--whether disclosure happened or not, etc.--which we've already mentioned. Another regards whether the stated purpose of the fee is false or misleading--whether it's billed as a cost-recovery fee when in reality it's a profit center, etc.--which we've also already mentioned. A third factor might be how this practice fits some of Regus's other practices that end up pertaining to the $50/month maintenance fee.

This comprehensive analysis, by the way, is exactly the way many courts would answer the question:

The test of whether a business practice is unfair involves an examination of [that practice's] impact on its alleged victim, balanced against the reasons, justifications and motives of the alleged wrongdoer.

Let's focus on that third factor. Note that the $50/maintenance fee, as described in section 51 of Regus's house rules, is Regus's mechanism for chipping away at any balance on your account, whether that balance consists of your retainer or any other sort of credit. And, again, the way that Regus's employees are trained to frame this fee is that it's Regus's due compenstation for performing a job Regus would rather not be performing ("we are not your bank"). The problem with that framing, though, is that it's disingenuous, as anyone who has ever suffered any sort of billing error as a Regus customer could attest.

Regus tries really, really hard to not refund money Regus collects from you unduly (this is probably no suprise to anyone). But, importantly, in most instances in which Regus does finally concede that you are owed a return of your money on account of Regus's billing error, Regus tries really, really hard to "return" that money to you in the form of an account credit as opposed to a refund. Why do you suppose that is? Because Regus wants to be your bank, despite what Regus employees are trained to say. Regus wants that the credit balance on your account to be as large as possible at all times, for a number of reasons; because this gives Regus more leverage over you, more ways to earn revenue (e.g. interest on the balance Regus holds on your account), and a larger pool of oustanding credit balance at the end of your relationship with Regus, which gives Regus the greatest chance to deduct the greatest number of $50 monthly maintenance fees. In other words, the notion that Regus does not want to hold as much of your money as possible at all times is plainly false. Regus's entire set of billing practices is designed to collect and hold onto as much of your money as possible, and that in-relationship aim serves Regus's end-of-relationship aim of returnign to you as little of your money as possible.

In addition, why would Regus not just automatically return to you any account credit balance at the end of the relationship? If it were true that Regus does not want to be your bank, would it not stand to reason that your account credit balance would be like a hot potato in Regus's hands, something Regus would be anxious to hand off as sson as possible? This would certainly be the most efficient way for Regus to "ptotect itself from not being your bank." The fact is, Regus does as much at it can to create as large of a credit balance on your account as possible; then does as much as it can to hold onto that money for as long as possible; and opts to not do anything that would reduce Regus's alleged "banking costs" so that Regus may then send you the surprise bill for its "banking costs"--actually, that last part is not correct, because you won't get a bill; instead, Regus just silently deducts $50/month from your money, which Regus if often able to get away with, because Regus was successful in the beginning at trying to keep you from discovering this $50/maintenance fee's inclusion in the deal.

So, in summary, there does not seem to be any valid "justification" Regus has offered for why the $50/month maintenance fee is fair, and the very existence of the $50/month maintenance harms Regus customers who don't know about it by making them $50 less rich each month after their relationship with Regus ends, which, seems to be Regus's motive for levying the $50/month maintenance fee anyway.