Direct debit wrongly paid back

Greg601

have a client who paid by Direct Debit when he joined the gym 36 months ago.

During that time he used the facilities on a regular basis without issue.

He phoned last month saying he wanted to cancel his DD, I said that's no problem and would refund him the amount which had already been debited from his account and left ot at that wishing him well.

He then phoned his bank saying he had never authorised the previous 36 monthly DDs and hadn't used the gym

They immediately refunded him the £1200 under the DD guarantee scheme, putting my account in the red.

What can I do to recoup my money.

Any advice greatly appreciated

la531983

Send him a Letter Before Action giving him 30 days to repay pending small claims court action.

BJV

That is nasty!

Do you have any proof he used the gym? Cameras signing in books? Logs? ( if he does not pay it will help prove your case in small claims ) 

penners324

You should be able to dispute that with your bank / DD provider.

retiredbanker1

Absolutely dispute this with the bank. They will re-debit his account and you will get your money back for now.

If he sues then the more evidence you have to show he did use your facilities the better for you.

uknick

I am somewhat surprised a bank will credit back payments going back 3 years without any contact with the provider.  Especially for an item such as gym subscription.  If that is normal practice by a bank, maybe I should resign from my gym after 12 years and ask for the payments back saying I never used it.

Mind you, it might be difficult for me to prove as I'm on first name basis with all the staff 

retiredbanker1

uknick said:

I am somewhat surprised a bank will credit back payments going back 3 years without any contact with the provider.  Especially for an item such as gym subscription.  If that is normal practice by a bank, maybe I should resign from my gym after 12 years and ask for the payments back saying I never used it.

Mind you, it might be difficult for me to prove as I'm on first name basis with all the staff 

The process is all automated - very little human interaction although this case will probably be looked at by someone in the D/D dispute resolution team.

LightFlare

I would be slightly concerned about the overall viability of the business anyway if £1200 is enough to tip the account into the red.

How big is this “gym” ?

Khaderbhai

Provide as much proof to the bank to dispute his claims that he never signed up to the DD. Do you have a contract or DD guarantee signed document? This would help. I think you can dispute DDs as far as back as you want as a consumer so it can happen although it is rare.

If no luck with the bank, I would be moving to a letter before action and small claims as was suggested above. 

LightFlare said:

I would be slightly concerned about the overall viability of the business anyway if £1200 is enough to tip the account into the red.

How big is this “gym” ?

Is this really helpful? It’s a small biz forum and cash flow can be tight at certain points in the months for sole traders/small biz. The OP may also just mean the DD nominated bank is in the red too as a result of the chargebacks rather than the overall business health.