Fixed Sum Loan Agreement?

splendidfellow

Hi,

Last March year i signed 12 months direct debit based membership for a Gym that closed in early december with no warning apparently due to management problems. I have heard on the grapevine that the gym plans to reopen at a location approximately 20 miles from where it was but i have no confirmation of this and no communication from the owner.

I checked my paperwork and what i signed was a fixed sum loan agreement for the 12 months period split into 12 equal monthly payments.
I signed the agreement at the gym with the gym owner but the payment are handled by a finance collection service. What are my rights concerning cancellation of my direct debit that is still effectively in place until March (i.e 2 more payments) even though the the Gym is closed and i can't use it?

The finance company still maintain i have to pay until March which seems totally unfair.

SF

andy.m_2

what do the terms and conditions state?

[Deleted User]

splendidfellow wrote: »

Hi,

Last March year i signed 12 months direct debit based membership for a Gym that closed in early december with no warning apparently due to management problems. I have heard on the grapevine that the gym plans to reopen at a location approximately 20 miles from where it was but i have no confirmation of this and no communication from the owner.

I checked my paperwork and what i signed was a fixed sum loan agreement for the 12 months period split into 12 equal monthly payments.
I signed the agreement at the gym with the gym owner but the payment are handled by a finance collection service. What are my rights concerning cancellation of my direct debit that is still effectively in place until March (i.e 2 more payments) even though the the Gym is closed and i can't use it?

The finance company still maintain i have to pay until March which seems totally unfair.

SF

if it was a finance company loan then you are stuck paying for it im afraid

paddyrg

However if the old gym owner/franchisee is still solvent, you could sue him for the months you couldn't use the gym.

splendidfellow

The company handling the 'fixed sum loan' are called debit finace collections. They are not actually a finance company as such they merely act as a proxy for the gym taking payments for the 12 month period.

I could be wrong but i think the name fixed sum loan agreement is not what it suggests. It is a 12 month anual gym membership split up into 12 installments with 0%apr. The gym wrote the agreement dfc merely collect. Surely not providing gym facilities for a contract based on that service and then taking money is therefore fraud.

The agreement states 'You have no right to cancel this agreement under the consumer credit act ....'

...but It would be interesting to see how this would pan out in a county court.

mjm3346

splendidfellow wrote: »

..but It would be interesting to see how this would pan out in a county court.

They don't have to take you to court to default you, so do you want to risk messing up your credit rating for 2 payments?

splendidfellow

No i don't want to risk it an won't. I wan't aware legitimate credit defaults could be actioned against someone without it going through the courts first. How do you know this?

[Deleted User]

splendidfellow wrote: »

No i don't want to risk it an won't. I wan't aware legitimate credit defaults could be actioned against someone without it going through the courts first. How do you know this?

its simple if you dont pay then you default and the lender can have the credit reference agencies show the default on your file,no court action needed

splendidfellow

Point taken the company collecting the payments aren't actually lending me anything!...thats all they do collect on behalf of the gym, the gym that is no more. dfc charge the gym a small ammount for each debit transaction this is how the company works they are not a loan company.

I think the fixed sum loan agreement is just they way they have 'packaged' the payments to protect their own interests and the interests of the gym. You could say that the Gym itself is the lender if a years gym membership paid by direct debit can be called a loan.

mjm3346

I am not saying they should get away with it, just to be aware of what may happen (could be they just drop it, they should not get paid for a service they are not providing).

splendidfellow

Yep. If they did decide to be &ssholes and hit my credit file i bet it would be a nightmare to clean up. As said, in monetary terms 2 £68 is a small price to pay for avoiding the situation completely on the other side of the coin the gym shouldn't be allowed to steal my money via dfc. dfc is allowing it to happen, they are aware the gym is shut.