Direct Debit Indemnity Guarantee

System

Sorry, Willo, but unless you can point to some authoritative documention of your position that the gym can 'make a counterclaim' [through the banks], I don't believe you.
The gym can try to take the disputed payment again, if the DD is still in place. Or the gym can (fraudulently in my view) set up the DD again, if has been cancelled, and try to take payment again. In either case, the customer can insist that the second try is, immediately and without question, reversed. See the case of Mrs B and the school, discussed by the Ombudsman, and linked to in my post above.
The key point, which many bank employees don't know, or pretend not to know, is that it is not normally for the bank to rule on, or even discuss, whether the gym is entitled to the money. Under the DD Guarantee (not indemnity as this thread is wrongly titled) a bank has to reverse any DD the customer says is wrongly taken, at once, no questions asked. It is then up to the supplier to pursue the customer for payment, by any means it chooses, including an agreed amicable reinstatement of the direct debit, and an agreed payment by direct debit.
I said 'normally' because, if it is sure of its ground, the supplier can, if it wishes, tell the customer's bank that the customer has mischievously or malevolently invoked the DD Guarantee in order to evade validly requested payment of a valid debt. In that event, the customer's bank still cannot make the payment, except in very special circumstances like Mr F and the stockbroker, where his bank paid under a different authority, not the Direct Debit. But the bank can, if it is convinced that the supplier is right, tell the customer (for example) that if he does it again, it will close his account, because he has abused the Direct Debit guarantee. And the supplier can, of course, invoke any penalties there may be for late payment, or for payment other than by direct debit, in its contract with its customer.

agsnu

http://www.bacs.co.uk/Bacs/Businesses/BacsAcademy/KnowledgeCentre/Pages/Glossary.aspx

Counter claim
A claim raised by a service user against a paying bank following settlement of an indemnity claim which the originator believes to be unjustified

willo65

agsnu wrote: »

http://www.bacs.co.uk/Bacs/Businesses/BacsAcademy/KnowledgeCentre/Pages/Glossary.aspx

Counter claim
A claim raised by a service user against a paying bank following settlement of an indemnity claim which the originator believes to be unjustified

Thnaks for that, saved me some routing around

l13unn79

Hi there

Just had a letter from the gym saying that they are going to take legal action against me for the outstanding sum of £440. I take it that this means that the bank managed to get the money off the gym - the bank paid me pretty instantly, but with the assurance if they couldnt get it back off the gym they would redebit my account - and that now the gym are seeking to get this money directly off my self. Could anyone tell me what my next step should be as they have given me seven days toi pay up.

Thanks

willo65

ring them and see if they will arrange a payment plan with you.

l13unn79

so Willo you are saying that I will have to pay them....there is nothing I can do?

willo65

It sounds like its going to boil down to your word against theirs and as you have no proof you cancelled but they have proof you have been paying up until the date you cancelld it I would think the legal position falls in their favour.

Scaredy_Cat_3

l13unn79 wrote: »

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.
Please help

Lee

Did you keep a copy of your letter? In your position, I would be writing a strongly worded letter to the gym stating that you cancelled in writing in January (enclose a copy if you can, or if not just tell them the date you sent the letter), and state you also made a phonecall to confirm and were given a verbal assurance that the membership and the DD had been cancelled.

From your OP it looks like this is the first DD they have claimed, so it's not like they have been taking money every month and you just didn't notice. I think you need to state the facts - ie this was cancelled in writing and then confirmed over the phone. Tell them you expect this 'debt' to be reversed as it is clearly their error and you do not expect to hear from them again. Be firm (but not abusive).

System

I read your OP as saying that the gym carried on taking the DD for many months after you cancelled, and you did not notice because you were abroad (and a bit careless!)

You also wrote that you had an email from the gym admitting that you had cancelled. If so, write to the gym, firmly and politely, saying that you cancelled on such-and-such a date, and that the fact of your cancellation is confirmed by their email. I'm assuming that they haven't advanced any new reason for doubting your cancellation (eg that their records show you used the gym recently!)

If they do take out a county court summons on the basis that you did not cancel, send the court a written defence explaining your side of the story. If the gym then pursues it to a hearing, you will need to go to the court and, politely and firmly, present your side of the story. You can take a friend with you; you do not need a solicitor. The proceedings should be conducted so as to help a lay person and should not be intimidating. The district judge will decide who is telling the truth. You will not normally have to pay any of the gym's legal costs, even if the district judge believes the gym, though you would have to pay the court fee. If the district judge does believe the gym, you can ask to pay in instalments.