Debit Finance chasing gym payments but gym has closed!

tirednemotional

Thanks for all the replies.

I'm due home shortly and will go through the contract with a fine tooth comb and post back.

@mountainofdebt: thats what i was wondering. It seems odd that eventhough the gym closed, the contract supposedly still stands.

@unholyangel: this is exactly what i was expecting and, if the bank had done as i'd asked, my cancellation of the DD would just be academic - that sound right?

@wealdroam: the owner of the now bankrupt gym had supposedly cancelled the contract with Debit Finance, as the business was being shut down. I cancelled the DD as i was told by the old owner, that my contract would be anulled with closing of the business. I have nothing in writing to say this, only the old owner's word and also having spoken to the new gym owner and having that confirmed by them. The new contract is for 6 months.

@dvardyshadow: i think that Debit Finance just handle the collection of membership payments on the gym's behalf. The previous gym contract was for a year paid monthly. I had paid the minimum term and was on a monthly 'rolling contract' which was then repaced by the new contract (starting 3/11/11) for a 6 month minimum term.

tirednemotional

Ok, I've had a thorough look at the contract. I had the dates wrong: I signed the new contract on 13/10/11.

The only thing thazt stands out is:

"Management & Member Responsibilities

We the Service Provider shall provide and manage the services and you undertake to comply with the rules of the Service Provider and with any amendments which may be reasonably introduced in the future."

I'm assuming they will quote this to cover whats happened here??

Also this:

"Termination of Service

Limited right to cancel

During the minimum period of the agreement you may cancel the agreement only:

1. If we materially and continually fail to maintain the standard of service you experienced when joining.
2. If we materially alter the operating hours of the services.
3. If you develop a medical condition which prevents you from using the services on an ongoing basis. An appropriate medical practitioner must provide written evidence that this is so.
4. If you move away from the area by a distance which we consider, at our sole discretion, to be too far to travel to the services for regular use. We shall require evidence that such a move has taken place." Would points 1 or 2 be relevant here? After all, the gym did close for a while.

unholyangel

When you say its closed a "couple" of weeks......2, 3, 4?

Are the finance company chasing you for payment for this period too? Did the old owner ever notify you in advance it would be closing for a set period of time or that it would be closing at all? If not, was there a notice on the gym stating it was closed?

IMO I think if possible, it would be better to argue that the supplier cancelled the contract. This is a lot easier to do if there has been something that has specifically told you the business has closed permanently. If not, then you'll basically be relying on the supplier committing a serious breach as being an acceptable reason to cancel the contract - however this is a little more shaky given that you havent notified them in writing that you're cancelling due to their breach. Doesnt mean all is lost though.

However, realistically I fail to see what grounds they have for chasing you for payment if you were paid up in full up until the day the gym closed.

Who does your gym contract state the contract is between? Between you and the old gym? Or you and the credit/debt company?

DVardysShadow

tirednemotional wrote: »

@wealdroam: the owner of the now bankrupt gym had supposedly cancelled the contract with Debit Finance, as the business was being shut down. I cancelled the DD as i was told by the old owner, that my contract would be anulled with closing of the business. I have nothing in writing to say this, only the old owner's word and also having spoken to the new gym owner and having that confirmed by them. The new contract is for 6 months.

@dvardyshadow: i think that Debit Finance just handle the collection of membership payments on the gym's behalf. The previous gym contract was for a year paid monthly. I had paid the minimum term and was on a monthly 'rolling contract' which was then repaced by the new contract (starting 3/11/11) for a 6 month minimum term.

Is the new gym owner prepared to honour the contract?

tirednemotional wrote: »

Ok, I've had a thorough look at the contract. I


Limited right to cancel

During the minimum period of the agreement you may cancel the agreement only:

1. If we materially and continually fail to maintain the standard of service you experienced when joining.
2. If we materially alter the operating hours of the services.
3. If you develop a medical condition which prevents you from using the services on an ongoing basis. An appropriate medical practitioner must provide written evidence that this is so.
4. If you move away from the area by a distance which we consider, at our sole discretion, to be too far to travel to the services for regular use. We shall require evidence that such a move has taken place."

Would points 1 or 2 be relevant here? After all, the gym did close for a while.

Although you could get out on ground 1, you would have to give an opportunity for the service provider to rectify this. If the contract defines Debit Finance as Service provider and the new owner is prepared to honour the contract, I think you are stuck with the contract. Your only get out would have been immediately the old owner shut the gym to send a letter giving them 14 days [not a magic number] to provide you with gym facilities.

But I am still dubious that your gym contract is with Debit Finance - I suspect you actually have 2 contracts wrapped up in there.

tirednemotional

@unholyangel: it was probably about 2 weeks - in all honesty, I cant say for sure. Not much help, I know. Sorry.
No - That's already paid because my bank didn't stop the DD for this when I asked, for some reason, so I've paid upto and including Jan '12.
The owner notified me at the start of November that it would be closing mid November - verbally, NOT in writing. No notice on the gym saying it was closed.

Thats exactly what I was thinking: the supplier (ie the gym) had cancelled the contract - after all, the gym had closed n therefore I would be paying for a service and to a company that no longer exists. Either that or quoting Debit Finance's own contract: ("fail to maintain the standard of service you experienced when joining" or "materially alter the operating hours of the service").

Thats the bit where I think I'm POSSIBLY liable: The new 6 month contract, starting Nov 11, would (if the previous gym owner HADN'T closed the business) be happily paid up to April (6 months). So, I guess, could be in breach of contract for stopping the DD.

As for the contract: it looks like its with the 'Service Provider" (old gym). Debit Finance are the collecting agent.

@dvardysshadow: essentially, yes, thats whats happened. It seems that the new gym has taken over my membership & payments. A letter I received from Debit Finance, states that I have a contract with the new gym - eventhough I haven't signed one with them. They've taken over my contract, partially way through it's minimum term despite the only contract being signed was with the old, now closed gym.

Ok, I see. So if I tried using clause 1, the fact that I'd be complaining means they'd have to do something about it in order to fulfil their part of the contract. ie "provide a standard of service" - in this case, provide a new gym owner(?), which they have.

The contract clearly states the service provider as: **** (old gym) and Debit Finance as the "Collecting Agents". So, would that mean that there ARE 2 contracts: one with the old gym (service provider) and one with Debit Finance (collecting Agents)? If so, the contract doesn't make that clear at all.

arcon5

I'd be very careful about cancelling the direct debt.
If you're paying the fees using a credit agreement, in order to preserve your credit rating, consider continue making payments then reclaiming it if you have a case.

tirednemotional

Yeah, I think I'll give Debit Finance a call tomorrow and sort the payment side of things out.

It seems that the old gym owner wasn't very good with business and advising clients etc - no wonder he's gone bankrupt!

Hmm...

unholyangel

Providing there isnt a clause in the original agreement that allows them to do so, I would also complain about them a) switching the contract over to the new gym and b) giving the new gym your details......data protection act breach. And even if there is such a clause, it may be considered a unfair contract term unless they allow you to cancel without penalty.

And providing there is no clause in your contract that allows them to change the provider/pass your contract to the new gym, it also puts you on good ground to claim the supplier ended the contract and as such, any credit agreement relating to it should have been cancelled also and you should only have been liable for payments up until the day the gym closed.

You should first try to find out whether they are merely a collecting agent or whether they have in fact provided you credit. If you have signed a credit agreement, it needs to contain certain information or it is unenforceable.

You could of course write to them denying the debt exists and ask them to provide proof. They will likely then send you copies of their paperwork.....including the credit agreement if it exists. It may well be worth a call to consumer direct, they may have template letters somewhere for this type of scenario.

tirednemotional

On the contract, it most definately states that they are the "Collecting Agent". I take this to mean that they act on the behalf of the service provider to a) collect payments and b) to enforce the guidelines stipulated in any contracts. I'm 100% certain that I don't have a credit agreement with Debit Finance.

On the copy of the contract, there is a "Data Protection Statement" which reads as follows:

"Debit Finance Collections plc always uses information submitted by you ('information') in accordance with all relevant data protection legislation. By signing this agreement you confirm your acceptance of the Data Protection Statement. Debit Finance Collections plc will use information as follows:

To supply services as requested by you including the transfer of information to employees, agents and third parties as required for this purpose.
For adminstrative purposes
To market Debit Finance Collections plc services to you.

Debit Finance Collections plc may also disclose details of your account to a debt collecting agency for collection and tracing purposes.
Debit Finance Collections plc may transfer its business (which include information) on sale or merger of its business."

Am I to think that the clause they're using is the part in italics?

tirednemotional

unholyangel wrote: »

the supplier ended the contract and as such, any credit agreement relating to it should have been cancelled also and you should only have been liable for payments up until the day the gym closed.

This is exactly how I see it but no doubt they will use the clause posted above as legitimacy for the new gym taking on my membership(?).

I'll try the consumer direct site too.

Thankyou so much for all the time & effort you've spent on this.:A

Cheers.