Direct Debit Indemnity Guarantee

l13unn79

Hi all

In November of 2007 I took out a gym membership but by january I decided to cancel it and sent out a letter to the gym and phoned to make sure they had cancelled it which they assured me they had. I went to this gym as you didnt have to join for a year. I then thought that was that. Until this week when my account went overdrawn due to them taking a payment out of my bank. After further investigation I realised with my banks help that they had never stopped the payments. I know I should have checked but due to working away most of the year I have little time to check my bank statements. My bank said I could claim under the DD Indemnity Guarantee and I just needed a cancellation date off the gym. The Gym have been very unhelpful and are saying they have no record of me cancelling and no-one remembers the phone call....obviously it was 15 months ago. I did though have an email off the Ops Manager yesterday stating that "when you cancelled your membership" which to me is an admission that I did cancel my DD. I know I didnt cancel the DD with my bank but in all truth I never realised I had to as I had or so i thought cancelled the DD with the gym.

Also because I cannot get a cancelletion date of my gym my bank have told me there is nothing else I can do and that as far as they are aware is the end of the matter unless I can get a date off the gym.

Please help

Lee

qazitory

Have you got a record of making the call, e.g. a phone statement? As that might help?

System

The bank employees who have told you this are wrong. Under the Direct Debit guarantee the bank must, no questions asked, reverse any direct debit you tell them was wrongly taken. Whether it was in fact wrongly taken is nothing to do with the bank. There may, I think, be some express or implied condition that you have to tell the bank within a reasonable time. If so I do not know what that time is.
Whether the direct debit was wrongly or rightly taken is a matter solely between you and the gym. Once the direct debit(s) have been reversed, it is up to the gym to ask you for payment by some other means, if the gym believes they are entitled to it; and, in principle, for compensation for their trouble, if they can show that you frivolously had the direct debit(s) reversed.
Try (which will be difficult) to find someone at your bank who actually knows the direct debit rules, instead of making it up as they go. If such a person confirms that some of the direct debits are too old to reverse, make sure they reverse all the recent ones.
Then write a 'letter before action', so headed, to the gym politely asking for the return of the sums taken after you cancelled, stating that you will sue them in the County Court if they do not cough up within (say) 14 days. If they don't pay, sue them. "Small claim", easy to do on line.
If they meanwhile go bust, you have lost your money, and there is nothing you can do that I know of.

l13unn79

can these letters that need to be sent between myselves and the gym be sent via email. Also Young nick thanks for your reply....how am i best approaching the bank now as they seem to of said nothing can be done.

agsnu

l13unn79 wrote: »

can these letters that need to be sent between myselves and the gym be sent via email.

No. You should send them by some method which gives you proof of delivery, i.e. by recorded post.

l13unn79

So what I am getting from these replies is that I should be sending a letter to the gym and not involving the bank at the moment ... is this correct?

dc110

Go back to the bank and insist on them completing a DDI - you could probably use youngnicks post pretty much word for word as its a good explanation. The bank are wrong in what they said. Dont let them fob you off.

Im not aware of any deadline by which you have to claim any indemnity sounds like the bank agent you spoke to was unfamiliar with the process.

willo65

If you are going to do indemnity claim then probably best to get dates right because the gym has I think 14 days to then make a counter claim at which point the monies will be debited from your account again and if you are not expecting could push you o/d and cause charges.

Mikeyorks

YoungNick wrote: »

Once the direct debit(s) have been reversed, it is up to the gym to ask you for payment by some other means, if the gym believes they are entitled to it;

Doesn't necessarily work like that. The DD Guarantee has a very explicit word 'error' in it.

If you insist on the funds being returned, by your Bank, under the DD Guarantee .... they then ask to be indemnified by the originator Bank. That Bank will immediately contact the Gym and ask to be indemnified for the claim. If they decline, because they consider no error has been made, the originator Bank signals back to the OP Bank that they won't be getting indemnified.
The OP Bank then re-debits the OP account, in order to recover their funds. End of story.

l13unn79 wrote:

So what I am getting from these replies is that I should be sending a letter to the gym and not involving the bank at the moment ... is this correct?

Yes ... you've left it too late to invoke the DD Guarantee when allied to the fact you've facilitated the Gym to dispute any error has been made.

Best to go direct to the Gym and negotiate / threaten or whatever.

olly300

OP this may be of interest to you:
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm

If you did everything verbally with the bank I suggest you write to them using recorded delivery or secure messaging via internet banking. State that a direct debit has been paid out in error to the name of the gym. List the dates and the amounts that you think have been wrongly paid. Don't go into any further detail as the contract between you and the gym isn't any of their business.

If the bank then pays you back but later reclaims the money follow their complaints procedure and threaten to take them to the FOS. Again you don't need to go into detail about the contract between you and the gym in your formal complaints simply state the direct debit was taken in error.

If the gym really wants their money they will first write to you then chase you with debit collectors as it's likely neither bank will want to get involved. I suggest if the gym does write to you asking for the money you immediately contact them in writing using recorded delivery and state clearly what evidence you have to show you have cancelled the membership i.e. phone records, copy of the cancellation letter. In the letter make it clear that if they chase you for the amount or put something on your credit record you will not hesitate to take further action against which may include legal action due to their breach of contact. Also state you will be making a complaint to trading standards and then make one. (You can do this on line via email.)

I've had direct debits ( for smaller amounts than gym membership) taken out of my bank accounts by companies that claim I have owed them money for contracts I defintely can prove I have cancelled when I have also cancelled the direct debit with the bank. (I've learned to keep all cancellation letters for 2 years.)

I never go into detail with the bank and always ask for my DD to be repaid in writing as I had staff at a certain bank which we own 70% of tell me verbally that I had to do lots of different things to be able to claim under the direct debit guarantee i.e. prove that I cancelled the contract etc. It wasn't true all I had to do was write a letter to the bank informing them that an error had been made with details of the company, dates and amounts involved. I mentioned in this letter that their staff member had given me misinformation and if they didn't pay me back I would take my complaint further. The company then debited my account again for all the direct debits so I wrote another letter to the bank threatening to report them to the FOS and received all my money back about 2 weeks later. The company concerned finally wrote to me a month later demanding the money and I wrote them a reply before they left me alone.

Edited to say:
I know other people who have been told similar information to what I was told by various other banks verbally either on the phone or in person and lots of them simply gave up claiming their direct debit. The reason for this is that your bank may never get the money from the original bank, or if they do it may be many months later. In my cases it seems that the money is taken from the original companies bank accounts as they have always written to me demanding the money. In my last case it took the company less than 2 weeks to demand the money. However this time due to the company involves poor customer service I had already threatened to take them to court so I gave them 21 days to leave me alone otherwise I would start court proceedings.

JohalaReewi

Juts to clear up any confusion. There are two DD schemes.

The Direct Debit Guarantee Scheme is the one that protects customers against DDs taken in error. This is the one where the bank has to give a full and immediate refund.

The Direct Debit Indemity is the scheme the bank uses to recover a DD refunded under the Guarantee scheme. It is internal to the bank.

A lot of banks don't like to give immediate refunds so will try to confuse the customer with the indemity claim waffle.

As other posters have said, if this happens to you, ask to speak to someone at the bank who knows about the guarantee scheme and can give you a full and immediate refund.

Also, you should be able to do a DD guarantee claim over the phone to your branch of the bank.