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  • FIRST POST
    VexedandConfused
    Are we in the wrong?
    • #1
    • 4th Feb 13, 2:26 PM
    Are we in the wrong? 4th Feb 13 at 2:26 PM
    On 6th September 2010, my partner and I took out a joint membership at a locally owned private gym, which I will refer to throughout this thread as 'BADGYM'.


    We arranged to pay by Direct Debit, from a bank account that we only used only as an administrative account, to pay bills etc.

    Once our Membership term was fulfilled, we decided that the membership no longer met our needs and that we should cancel it.

    My partner went into the club and cancelled our membership with a member of staff, in person, on the front reception desk. The club is a local business that is barely more than a stone’s throw from our home and so wasn’t worth the cost of a stamp as we could cancel the membership face to face.

    When my partner cancelled the membership, details were taken by the reception worker and then when asked whether we needed to do anything else, he was told by the same worker, “No that’s it, we’ll sort the rest”.

    The following month, we joined another gym that better suited our needs.
    (We have copies of membership forms, showing date of joining new gym)

    As far as we were concerned, our membership at BADGYM was terminated and we never attended the club or used the facilities again.

    Some months later, we had cause to review the admin bank account that we had used to pay BADGYM in relation to something else, when we saw that BADGYM were continuing to take payments from us and had been doing for some months, debits totalling £520, despite ending our membership. We had been paying for two different gym memberships simultaneously without knowledge.

    My partner visited BADGYM to inform them of their mistake. The manager checked the system and from their records retrieved details of the date that we had terminated our membership.

    The Manager of BADGYM stated that he would sort out a refund for the money that had been taken in error but that this would not be a fast process or easy process partly due to the fitness industry “being on its a*se”.

    The Manager then sent an email, detailing and acknowledging the date that we terminated our membership to a company I will call 'MIDDLEMAN' – the direct debit collection company used to collect monies for BADGYM. He copied us in to this email. We have kept a copy.

    He also stated that BADGYM no longer dealt with MIDDLEMAN and had moved their dealings to another direct debit collection company, shortly after we had ended or membership. He told us that all members had been written to in relation to the change of direct debit handing to the other company. We did not receive such a letter. This would have alerted us sooner to the fact that we were still making payments. I would suggest that we did not receive this letter as we were not showing as live members on BADGYM's systems.

    We later received a letter from the Manager stating that the owner of BADGYM was not willing to refund our money, because it was our responsibility to cancel our direct debit with the bank and that we signed a contract to state that any money taken from our account would not be refunded if we did not do this. (We are not in possession, nor have we seen a signed copy of this contract at this point.)

    It was my understanding that a Direct Debit is an agreement set up between the company requiring payment and the customer’s bank, that the customer gives permission for and that it is managed by the company requiring payment, not the customer.

    These payments were taken from us even though it has been acknowledged by BADGYM that our membership was cancelled. These amounted to £520. A large amount of money to pay out for receiving no service.

    We made a number of calls in relation to this, calls to MIDDLEMAN who disassociated themselves from the situation, stating that the monies that they had taken from us, had been paid to BADGYM and that our issue was with them. We made calls to our bank and also to Citizen’s Advice Bureau. We received advice to use the Direct Debit Indemnity Scheme to get the monies refunded through our bank due to the payments being taken in error.

    The bank refunded our payments in December 2012. Of course the indemnity claim would go from our bank to MIDDLEMAN as they had taken the actual payments from our bank, although they had sent the monies on to BADGYM.

    We did not hear anything until 29th January 2013 when MIDDLEMAN the direct debit company, wrote a letter to us stating that they had received an indemnity claim from our bank. They stated that neither they nor the Manor had received notice to cancel our membership agreement and that we had signed a contract saying that no payments taken were refundable and that therefore we must pay £520 back to MIDDLEMAN or that the debt would be referred to a debt collection agency with an added admin charge of £20.


    This is the situation as it stands. Are we in the wrong? Any advice as to what we should do would be really appreciated as we really do feel like underdogs against these two companies!


    Thank you in advance,
    VexedandConfused
Page 1
    • Malcnascar
    • By Malcnascar 4th Feb 13, 2:51 PM
    • 947 Posts
    • 1,022 Thanks
    Malcnascar
    • #2
    • 4th Feb 13, 2:51 PM
    • #2
    • 4th Feb 13, 2:51 PM
    The Manager then sent an email, detailing and acknowledging the date that we terminated our membership to a company I will call 'MIDDLEMAN' – the direct debit collection company used to collect monies for BADGYM. He copied us in to this email. We have kept a copy
    Firstly please ensure the direct debit is cancelled at your Bank.

    Look here for the direct debit rules

    http://www.directdebit.co.uk/Pages/Home.aspx

    If the rules support your position, you have retained the above e-mail forward copy to middleman

    I hope I am wrong and its just a gut feeling but I feel a battle looming for you.

    If it were me I would be looking at the legal advice bit on my home insurance policy
    Last edited by Malcnascar; 04-02-2013 at 2:51 PM. Reason: word removed
  • VexedandConfused
    • #3
    • 4th Feb 13, 3:19 PM
    • #3
    • 4th Feb 13, 3:19 PM
    Thanks for your post. I will look into this. Do you think that we need to pay the money back to MIDDLEMAN in the first instance then?
    • Malcnascar
    • By Malcnascar 4th Feb 13, 3:56 PM
    • 947 Posts
    • 1,022 Thanks
    Malcnascar
    • #4
    • 4th Feb 13, 3:56 PM
    • #4
    • 4th Feb 13, 3:56 PM
    Such a hard question to answer, I would contact Middleman and explain that you have the e-mail confirming the memberships were cancelled and the effective date. I would hold on to the cash but explain to them you are checking the direct debit rules regarding cancellation and clawbacks and you will be in touch with them within xxxdays. Assure them that if you find you are incorrect in your action you will return the funds.
    Then I would quickly see where I really stood.
    • FireWyrm
    • By FireWyrm 4th Feb 13, 4:50 PM
    • 6,406 Posts
    • 12,110 Thanks
    FireWyrm
    • #5
    • 4th Feb 13, 4:50 PM
    • #5
    • 4th Feb 13, 4:50 PM
    Your contract was with BADGYM not MIDDLEMAN. In this case, BADGYM should have contacted MIDDLEMAN and advised them that their customer had cancelled their membership in accordance with the rules set down by BADGYM. This is entirely down to BADGYM and they should be sorting out the mess. You have your refund, which you are entitled to since MIDDLEMAN had continued to retrieve money via DD that they werent entitled to.

    In this case, I think you should WRITE to BADGYM and tell them that you are proceeding with legal action against them if they do not deal with their agent MIDDLEMAN and put MIDDLEMAN in the picture once and for all. You will not and are not required to return the money which was taken in error and if BADGYM dont pull their socks up, they'll find themselves on the receiving end of a complaint to the OFT regarding their mishandling of the issue.

    Tell MIDDLEMAN to F-off.

    Now, you SHOULD have ensured that the DD was cancelled at the bank (and I always do) but hindsight is a wonderful thing. In reality, you had (at the end of your term) correctly approached your service provider and cancelled you agreement with them. What happened after was entirely their fault and they should be fixing it....like now.
    Debt free by Christmas 2015 or bust. Outstanding debt £11,397 £9550 £8690 £7638 £6300
    Meet my new best friend : YNAB (you need a budget)
    My other best friend is a filofax.
    Do or do not, there is no try....Yoda.

    • agrinnall
    • By agrinnall 4th Feb 13, 5:47 PM
    • 14,240 Posts
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    agrinnall
    • #6
    • 4th Feb 13, 5:47 PM
    • #6
    • 4th Feb 13, 5:47 PM
    Good advice offered above. As FireWyrm says you should have cancelled the DDs at your bank's end as well, but many people don't know it's possible to do this (although I've noticed a lot of companies are now telling their customers to do it, which is a positive move on their part). The other thing you should have been doing is checking your account more often, I'd like to think you'd notice money going out before it built up to £520.
  • VexedandConfused
    • #7
    • 4th Feb 13, 8:16 PM
    Thanks so far.....
    • #7
    • 4th Feb 13, 8:16 PM
    Thank you FIREWYRM and MALCNASCAR.
    I will contact MIDDLEMAN and provide a copy of the email sent by BADGYM with our termination date on it. I will tell them that I am unwilling to pay them the money back until it is proven that I am at fault and that they should approach BADGYM for the money.

    I am a little worried about the debt being referred to a debt collection agency and possible CCJs etc?? They have said that they want the money by 5th Feb!

    I feel that BADGYM will insist that I am in the wrong due to the contract that I have supposedly signed which says that any payments taken will not be refunded if I did not cancel my D/D.

    Thank you also AGRINNALL.....but trust me.....nobody could feel more stupid about not checking their account or not cancelling the D/D than I do already! :-)
    • FireWyrm
    • By FireWyrm 4th Feb 13, 9:05 PM
    • 6,406 Posts
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    FireWyrm
    • #8
    • 4th Feb 13, 9:05 PM
    • #8
    • 4th Feb 13, 9:05 PM
    DDs are not standing orders.

    In the case of the DD, the company has the right to request and receive the money. In the case of Standing Orders, your bank sends the money to the company. This is a subtle but important distinction.

    In short, MIDDLEMAN continued to request money after the contract with BADGYM was cancelled. In short, BADGYM are to blame for not instructing MIDDLEMAN to stop taking the money. Your contract is with BADGYM and you have correctly cancelled your obligation to them and received acknowledgement that the obligation was completed. This means that although there is a clause in there about supposedly cancelling a DD, it is probably entirely unenforceable in any case since the additional funds were not theirs to take. Your contract is with BADGYM, not MIDDLEMAN and so stick to your guns.

    Be prepared though for a fight. You might end up in court, but I suspect a few stiff letters mentioning the OFT,. Trading Standards and the FSA will cause them to back down and write this off as a 'good will gesture'. Considering all the bad press gyms are getting lately and the latest information issued by the FSA about unfair gym charging structures, I'm betting they dont want to try this one in public.

    Let it be a lesson though...never let a DD continue to sit long past its use.
    Debt free by Christmas 2015 or bust. Outstanding debt £11,397 £9550 £8690 £7638 £6300
    Meet my new best friend : YNAB (you need a budget)
    My other best friend is a filofax.
    Do or do not, there is no try....Yoda.

  • VexedandConfused
    • #9
    • 4th Feb 13, 10:39 PM
    • #9
    • 4th Feb 13, 10:39 PM
    Thanks very much for your time FireWyrm. I have been losing sleep over this!
    • Wyndham
    • By Wyndham 5th Feb 13, 7:47 AM
    • 1,917 Posts
    • 2,148 Thanks
    Wyndham
    Learn a lesson here - when you get a back statement, take a quick look down it at the very least to check there isn't anything there you're not expecting to see. And if you're changing something, make doubly sure that you check it has gone through.

    Not sure what to advise for your situation, but I hope you have good luck in sorting it out.
    • pmduk
    • By pmduk 5th Feb 13, 8:41 AM
    • 7,102 Posts
    • 5,124 Thanks
    pmduk
    Given that the gym accepts that no contract existed, why wouldn't the DD guarantee apply? It would be the quickest way for the OP at least.

    OP, make sure you've no other live DD mandates on any of your accounts that need cancelling.
    Last edited by pmduk; 05-02-2013 at 8:50 AM.
  • VexedandConfused
    Thanks pmduk,
    The gym are now saying that they have no record of us cancelling our membership, but fortunately we have a copy of the email that we were copied into which shows their acknowledgment (an email that they sent to MIDDLEMAN). We already have the refund from the bank, but the bank have billed MIDDLEMAN, so MIDDLEMAN have now come threatening us with debt collectors! Oh dear!
    Today I have written to MIDDLEMAN telling them that they need to approach BADGYM for the money not us, as our contract was with BADGYM not them and that the monies were taken wrongly due to the fact that we had terminated our contract. I have enclosed a copy of the email mentioned earlier as evidence of this.
    VexedandConfused
    • pmduk
    • By pmduk 6th Feb 13, 7:49 AM
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    pmduk
    tell middleman to go where the sun don't shine. They've no relationship with you, just badgym. Tell them you won't enter into any further correspondence with them (and stick to it).

    I've now reread the original post and seen what I originally missed, but my point remains, you've no contract with middleman.
    Last edited by pmduk; 06-02-2013 at 8:21 PM. Reason: Typo: corrected they to them
    • simplydevine05
    • By simplydevine05 7th Feb 13, 8:21 PM
    • 198 Posts
    • 252 Thanks
    simplydevine05
    The fact of the matter is that a company cannot take a direct debit from your account if you did not authorise it. You did right with the indemnity claim. Don't worry about MIDDLEMAN, their threatening letters are actually illegal. They can send it to a debt collection agency if they wish who can not take any action against you at all. I had something similar years ago and it was also with a gym. Needless to say the debt collectors quickly gave up. Don't lose anymore sleep over it and to be honest I wouldn't even worry about court. It is extremely unlikely to go that far as it will cost them too much to persue. They may try more bullying but as others have said, tell MIDDLEMAN you will not communicate with them again and deal with BADGYM.
  • VexedandConfused
    Debt collectors....
    Thanks simplydevine05.

    Yesterday I received a letter from a debt collection agency bolting on an extra £200 in fees for their trouble. (I notice from the address on the letter that they are based on the same floor of the same building as MIDDLEMAN)

    I have sent copies of the letters that I have sent to BADGYM and MIDDLEMAN to the debt collectors, stating that they need to resolve it between themselves. Gulp. Hope it's enough!
    • le loup
    • By le loup 14th Feb 13, 12:06 PM
    • 3,311 Posts
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    le loup
    The debt collectors and middleman are the same company. It's a common practice.
    • pmduk
    • By pmduk 14th Feb 13, 12:06 PM
    • 7,102 Posts
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    pmduk
    They can add as many charges as they like. The fact remains you don't owe anything.
  • VexedandConfused
    Update.
    Nothing heard so far........
    • pmduk
    • By pmduk 25th Feb 13, 9:08 AM
    • 7,102 Posts
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    pmduk
    Tell them you won't enter into any further correspondence with them (and stick to it).
    Originally posted by pmduk
    If you've stuck with this then you've no reason to hear from them again.
    • macman
    • By macman 27th Feb 13, 9:18 AM
    • 40,040 Posts
    • 16,199 Thanks
    macman
    Only the account holder can cancel a DD-not the payee.
    All the payee can do is to cease to draw on it, but if so it still remain 'active'.
    No free lunch, and no free laptop
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