Can I put through an indemnity claim? HELP!

cmk88

Im looking for some help with a problem im having with a gym contract.

My mum took out a contract with the local gym for my sister in 2006 for 1 year, then renewed in 2007 for the second year as my sister wasnt old enough to set up her own contract. When my sister turned 18 in 2008 my mum did not renew the contract (it was not a rolling one, you had to accept a new one each year) and my sister took it out in her own name with her own bank details for the direct debit.

However, the gym set up my sisters contract, and started the direct debit with both my mums account details and my sisters account. So they have been recieving two payments for the one contract.

The gym changed ownership the month after this happened, and they new owners refuse to do anything about it as they say they are having problems with the finance company (where my mum and sisters money was going to) that the previous owners used.

Am i right in saying that we would be protected under the direct debit agreement and can ask the bank to put through an indemnity claim?

If not does anyone have any other solutions?

RayWolfe

Not sure. Two DDs were signed. That makes two contracts. Try stopping one of them.

EarthBoy

You can instruct the bank to cancel the d/d and reclaim the money under the d/d indemnity scheme. That part of it shouldn't cause a problem because it's not for the bank to dispute whether the money was rightly paid/claimed or not, they should act on your instructions. However, if the gym have a contract then they can still demand the money and send in the debt collectors or sue you for payment if they want. You will need to sort that part of it out with the gym.

cmk88

Thanks for your replies.

The gym didnt have two contracts, they had a contract in my mums name which was cancelled, the direct debit was cancelled also. Then my sister took out a new contract. so there was only 1 contract and 1 dd signed. surely they cant reinstate a cancelled contract and dd agreement without consent?

At the gym you signed a written contract, which they stored and gave you a copy of. We have the copy from 06-07 and 07-08 in my mums name and bank details, confirmation of the cancellation from renewal of the contract(from the gym), then a copy of one in my sisters name and bank details from 08-09. Its as if they have just taken the dd details from an old contract and taken money from it. My mum has confirmation from the bank also that she cancelled the dd with them on the same day that she advised the gym she would not be renewing (should have said that in the previous post)

she spoke to the bank there and they said that they cant do an indemnity claim unless they can prove that it was their fault- is this correct?

cmk88

sorry, also, they still have a contract running with my sister, with her bank details which is being paid every month. theyr just not getting the double payment like they have been for the last 6 months so theyr quite happy with that, just refuse to give back the double payment for the contract as they are saying its not their fault either, its the previous owners

RayWolfe

Lesson for the future, cancel the DD with the supplier AND THE BANK.
However that doesn't help you now. From what you say, I would think that these DDs have been taken improperly and the DD indemnity does apply. Put it in writing to the bank and DEMAND repayment. Quote the DD guarantee.

cmk88

Thanks,

Im going to type something up just now. i didnt think she was right when she said she needed to prove it was their fault.

We cancelled it with both the gym and the bank on the same day, that was in june, no payment in july came out, then a new dd was set up and first payment in august.

its just as if they have taken the account details and set it up again....sold the business and left!

EarthBoy

cmk88 wrote: »

...she spoke to the bank there and they said that they cant do an indemnity claim unless they can prove that it was their fault- is this correct?

No, that isn't correct at all. In fact, it's none of the bank's business. Ask to speak to a manager and remind them that the direct debit guarantee promises a full and immediate refund if direct debits are claimed in error. There is no obligation on you to prove anything whatsover to the bank. If it turns out that the gym claimed the money correctly then they will have to pursue you for payment by other methods.

Mikeyorks

EarthBoy wrote: »

If it turns out that the gym claimed the money correctly then they will have to pursue you for payment by other methods.

No - they will reject the Bank indemnity claim. And the Bank will then re-debit the customer account.

EarthBoy

I didn't think they could reject the indemnity claim -can they? It would make a mockery of the system.

JohalaReewi

she spoke to the bank there and they said that they cant do an indemnity claim unless they can prove that it was their fault- is this correct?

Kind of. The indemity claim is where the bank get the money back from the supplier. What you want is the DD guarantee scheme where no such proof is needed. However, you may later need to prove to the bank that the DD was incorrect (shouldn't be a problem if you have a letter from the gym saying it is cancelled).

I suggest contacting the bank and requesting a refund of the incorrect DD payments taken, under the direct debit GUARANTEE scheme. Your reason is that the wrong amounts were taken (they should have been zero!). The club did not notify you that they were going to be taken and there is no contract and DD mandate. Make sure you ask for a full and immediate refund under the DD guaranteee scheme.

Many banks like to pretend that they don't have to do this and will mention the indemity scheme. The indemnity scheme is what the bank uses to get the money back for itself, you need to talk to someone at the bank who knows about the guarantee scheme which protects customers, and can authorise the full and immediate refund. Also make sure the DD is cancelled.

In future, keep a close eye on your statments and stop incorrect transactions as soon as they happen. It is easier to sort out than if you haven't noticed for six months.