Rights regarding unauthorised collection of direct debits

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billythefish

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Hi everyone

My brother is a member of a gym. He cancelled his membership but two more direct debits were taken from his account. He's having problems getting them back. They're basically trying to fob him off.

What are his rights here? Any help would be great.
 
He should of cancelled his direct debit with the bank and not think they wouldn't keep on taking the money.

What does it say on the contract that he signed? Most gyms are for a year, so if you cancel before the time is up your meant to carry on paying, i've not know anyone that has done this and has been forced to pay. Again I know a lot of people that got caught out on not cancelling their DD with the bank and not a single one of them got their money back either.

Even with an agreement i had with them to suspend my account for a year they still took 3 months out of my account. They were only meant to take my son's membership and not mine. After the 3rd month i cancelled it and said i would get it taken off when i re-joined. They refused to do this and of course i didn't get the 3 months back.

I know every single member of staff at this gym because my mum works there and still i didn't get my money back.

Take it as experience that if you cancel something always cancel it yourself from your own bank. Cause the gym's wont cancel it. They would quiet happy let it carry on coming out of your account.
 
Gyms often include a notice period of cancellation of membership in the contract - some are 1 month, others 2.
 
There was one rate for people signing up for the year and one for people who pay monthly direct debits, effectively renewing the membership each month. The DD comes out at the start of the month and does you until the end of the month.

Is there no recourse with the financial regulator in cases like these? Who (if anyone) polices the correct administration of direct debits?
 
Are you sure about that?

I dont think your re-newing the membership every month they have just given the option to pay by monthly DD. You would of still signed up for the year.

Not sure about what gipimann said about the notice of cancellation, in my case i didn't have this.

You will have to read all of the contract your brother signed to find out exacetly what it does and doesn't say.

When your brother cancelled he should of recieved a reciept as such to say that he wanted to cancel. This will have the date on it. It your contract does have a notice period that is say 1 month then you should be entitled to get the 1 months back.

If you dont have a notice period then all they will say is you should still be paying untill the year is up. Bascailly you should be grateful were not deamanding the remaining money from you. In a way they are right, if you signed up for a year and then decided to leave, move to another gym they should still be entitled to the remaining money.

It's the same with a lot of companies, mobile phone contracts, sky ect ect
 
Strictly speaking, if your brother cancelled the membership (and therefore the direct debit), the gym should not have collected any futher premiums.

The Irish Payment Services Organisation (IPSO) manage the Direct Debit Scheme and according to :

The payer can cancel or amend the Direct Debit instruction at any time by informing their Bank in writing. They can also inform the Originator. All correspondence should be retained.

The payer’s Bank will then inform the Originator of the cancellation or amendment.

If the instruction is cancelled no further collections are permitted.

If it is established that an unauthorised Direct Debit was charged to a Payer’s account the Payer is guaranteed a prompt refund by their Bank.
Click to expand...

In this case your brother is the payer and his bank is the Originator.

However, as others have said, if your brother cancelled his membership before the contract expired, then the gym are legally entitled to the balance due, even if technically they shouldn't have collected it via direct debit. In the gym's defence though, and speaking generally, if they instead sent an invoice for any balance, they run the risk of getting nothing back.

If it is a case that the contract has expired, or it was a month to month membership, then they are obliged to refund the money. The first port of call would be a registered letter to the bank, copied to the gym manger, stating that direct debits were paid after a DD was cancelled and that a refund is required. Give as much detail in the letter as possible: the dates and amounts of the collections, when the cancellation letter was sent and who it was sent to.
 
If you provided notice that you were cancelling membership to the bank you are entitled to a full refund. Sometimes what happens is that people dont advise the company with which you wish to cancel your membership.... contracts that draw you into notice periods of withdrawal from contract - is an unfair term into a consumer contract and "is not enforceable" as it places the company in an unfair dominant position over the consumer. Somebody I know used this unfair term in cancelling a phone contract and when in court they won.
 
NovaFlare77 said:
Strictly speaking, if your brother cancelled the membership (and therefore the direct debit), the gym should not have collected any futher premiums.

The Irish Payment Services Organisation (IPSO) manage the Direct Debit Scheme and according to :



In this case your brother is the payer and his bank is the Originator. Not so - the Gym are the originators

However, as others have said, if your brother cancelled his membership before the contract expired, then the gym are legally entitled to the balance due, even if technically they shouldn't have collected it via direct debit. In the gym's defence though, and speaking generally, if they instead sent an invoice for any balance, they run the risk of getting nothing back.

If it is a case that the contract has expired, or it was a month to month membership, then they are obliged to refund the money. The first port of call would be a registered letter to the bank, copied to the gym manger, stating that direct debits were paid after a DD was cancelled and that a refund is required. Give as much detail in the letter as possible: the dates and amounts of the collections, when the cancellation letter was sent and who it was sent to.
Click to expand...
 
billythefish said:
There was one rate for people signing up for the year and one for people who pay monthly direct debits, effectively renewing the membership each month. The DD comes out at the start of the month and does you until the end of the month.

Is there no recourse with the financial regulator in cases like these? Who (if anyone) polices the correct administration of direct debits?
Click to expand...

Unfortunately in reality nobody polices the correct administration of direct debits! There is no proper complaints system. And there is no sanction against companies who do not comply with the terms of the dd system. No company has ever been expelled from the direct debit system since its inception. (IPSO have confirmed this for me).

You say that your brother cancelled his membership of the gym. Was there any minimum membership term involved? If so had he completed it?

Even if your brother did not cancel the direct debit with his bank (which is the proper way as detailed above) if there was no period of a minimum term remaining then the gym had no right to access his account. The simple existence of a direct debit does not give someone the right to use it.

So could you clarify if there was any minimum term outstanding? Always a remember a direct debit is a method of paying a bill nothing more nothing less. If there is no bill there should be no direct debit!!
 
Hi all

Thanks for the replies. The owner of the gym finally stumped up a cheque for this amount so my brother's a happy bunny. I find it amazing that no-one polices the whole direct debit market. Scary...
 
From previouse post 27/07/09 Ref BT Direct debit

I have said many times on AAM that I will not set up a DD due to past problems. I am a BT customer and do not pay by DD, they email when the payment is due and I either pay on-line or over the phone. With ESB I use open 24. It is in their own interest to take control of your payments. My son was paying DD for many months after stopping a service (he should have check his bank statements). He has lost this money.
I have refused electric supplies from Airtricity and Bord Gais because they insist on DD only, even though I could save money by changing. If we all refused DD it would be in our interest instead, and they would soon stop insisting on DD.
 
Didn't your son cancel the DD with his bank? Personally, I don't think the answer is to say no to DD, I think people need to take more care and responsibility for their personal finances. Simply saying "but I cancelled it with the company" isn't good enough.

My own brother admits he should have sent a letter to his bank cancelling the DD.
 
A lot a people assume that the direct debit is cancelled by the company receiving the payment which should be the case. The law was changed a couple of year back because this was the only way it could have been stopped. I remember trying to stop a DD and the bank said they could not stop it, only receiver could, thankfully that was changed by the Finacial Regulator, but as previously posted, no one is policing the system.
If you dispute the amount, they already have your money.
 
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