Gym closed - how to cancel DD without affecting Credit Score

oliver789

hi there,


Not sure if this is in the right section so apologises if it isn't. Posted it in the credit rating section as I'm wondering if this will affect my credit rating...


So I took out a gym contract for a year paying by Direct debit monthly, however, my gym has recently gone into liquidation. (I went to go to the gym as normal and on the door there was a sign saying its closed and gone into liquidation).


Now I want to cancel my DD as I obviously can't use the gym anymore. I can easily cancel my DD via my bank. However, I have tried to email and call my gym but no response.


How do I go about cancelling my DD? I've heard that if you don't tell the company and they try to take a DD payment and you've cancelled it then it shows as a refused payment and affects your credit rating!


Anyone got any advise?


thanks in advance

MisterBaxter

If the payments were being made direct to the gym I would just cancel the DD for now; if the gym has gone in to liquidation then they can't provide the service that you are paying for. If a payment were to be taken you would have to fight to get it back. I don't see how they can report any kind of default to the CRA as the contract has in effect ended with them going in to liquidation. I'm not sure that their bank would allow to the collect any DD payments if they have gone in to liquidation (I'm sure someone else will comment on this).

If the contract was funded through some sort of credit agreement with a third party then I would suggest contacting the credit company first and explaining what has happened. If it is a credit agreement then you may even get a refund on any part month payment that has been made. The Consumer Credit Act would cover you in this situation.

EIther way you shouldn't have to pay any further monthly payments.

I had the same thing happen; my membership was through a third party credit agreement. They actually contacted me to inform me what had happened and ended the contract. You will probably find that at some point the firm appointed to deal with the liquidation will also be in touch with you.

Carl31

You are within your rights to cancel a direct debit at any time, however if you have a contractual payment to meet, and fail to do so, then you could be in trouble. If the gym has folded, then they wont be taking the DDR anyway, even if they do they will pay it back

mrsammyp

I doubt your gym have been reporting to any of the CRA's, but you can check two out of three with clearscore & noddle for free.

HelpfulTips

As mentioned above it's unlikely the gym would reported to credit reference agencies, and as they are no longer in a position to fulfil their contractual agreement the contract will be terminated.
However, I would suggest contacted the administrators just to try and avoid any future issues, as although you may well be in the right, if it were to report to yor credit file it can be difficult having this rectified

oliver789

thanks for the replies!!


Just walked past the gym again and they have a notice saying 'all enquiries to be directed to the liquidator' and the address of the liquidator.


Might be a good idea to write to them explain the situation and state that I will be cancelling my DD to the gym!


Thanks
Oliver