cancelling virgin rolling contracts - this may help

[PGH7447]

Clause 8.2 States

 

Grounds for early terminination by you:

 

2. We increase your membership dues;

 

-----

 

According to their own press release

virginactive.co.uk/VA/Content/PressRoom/ValueAddedFacts.aspx

 

They did not decrease the Diamond membership to take into account the VAT change to 15%.

 

Excluding VAT, Diamond membership outside London was £34.85 the VAT element was £6.10 (this figure is correct for all memberships taken out before 1/12/08)

 

When the VAT change took effect on 1/12/08 the cost of membership excluding VAT increased to £35.61 the VAT element changed to £5.34

 

Not passing on the VAT reduction constitutes an increase in membership fee by Virgin Active and therefore allows anyone who joined before 1/12/08 and who has not had the VAT reduction applied to their monthly direct debit the absolute right to terminate the contract early under clause 8.2

[PGH7447]

Virgin Active Health Club - Fitness News

 

Your membership

 

We’ve reduced - and in most cases, eliminated - planned increases to annual membership subscriptions for 2009, freezing many membership rates at 2008 levels. The only exception to this is our Diamond membership, which will remain unchanged as the rate is fixed as a price for life.

------------

so a membership fee of in my case of £54.95 = vat of £9.61

 

therefore after the VAT decrease it should have been

 

£54.95 = VAT of £8,24

 

so my membership increased by £1.37

 

over 9 months dec 08 to Aug 09 = £12.33

 

so I can in effect terminate anytime I like:D

[Pedders78]

PGH7447 - Do you know for definite this course of action will work?

 

My last correspondance to ARC was asking *(more demanding) they provide proof i terminated my conatrct in contravention to their own terms and conditions - which they have just provided by way of a true copy of my original signed contract!

 

So my next move will be to continue to dispute the fairness of these rolling contracts - referring to the guidelines set out by the OFT (as previously posted in another thread by your good self) whilst also citing the VAT decrease and subsequent increase in gym membership you have mentioned. Then it will be their move, and if they continue to threaten legal action - i will basically say come and have a go if you think you're hard enough!

 

How did this course of action work out for you?

[PGH7447]

see this thread

 

http://www.consumeractiongroup.co.uk/forum/gyms-health-clubs/226934-virgin-active-[problem].html

[Pedders78]

I have just sent them this letter - let's see how they respond to it!

To whomever it may concern,

Re: Virgin Active Ltd – Account

I am writing in response to you recent correspondence dated 28/10/09 in which you have provided me with a true copy of my original signed contract with Virgin Active. After reading through the terms and conditions (a luxury I was unable to indulge in up till now as I was never given a copy of this contract for my records despite repeatedly requesting one) It seems Virgin Active were in fact in breach of their own terms and conditions for the following reason:

• In Clause 8.2 it states that grounds for early termination by me include:
  

· We increase your membership dues. Which due to the VAT decrease in Dec 2008 from 17.5% to 15% and subsequent non-adjustment by Virgin Active to the net cost of my membership, has clearly happened - thus negating any claim on the part of Virgin Active relating to a breach of contract on my part (which I still dispute.)

I would also point out that after taking advice from The Office of Fair trading, it seems these type of rolling contracts are deemed to be unfair, therefore should any court case arise, the OFT would clearly side with me. FYI, the following excerpts are taken directly from the OFT’s most up to date guidelines.

· 8.1 A term which clearly stipulates the length of a contract is likely to be a ‘core’ term, see paragraphs iv and v of Part III. However, other terms which affect the length of a contract do not necessarily amount to ‘core’ terms. An example would be a term that automatically extended the contract period and relied on the member’s inertia or ignorance to achieve the extension. Such a term is unlikely to be regarded as a core term, and so could be assessed for unfairness.

· Automatic renewals 8.2 A term in a fixed period contract which automatically commits the member to a renewed fixed term unless early notice to cancel is given is likely to be considered unfair by OFT.

I also believe that Virgin Active have acted, if not illegally then certainly unethically with regards to making me sign a contract that’s main sticking point was not made clear to me at the time of signing, and also for not keeping in touch with me (a supposed valued customer) with regards to any changes, products, news and in this case automatic renewals that may or may not have been implemented! This, I believe is in direct contravention of both the Misrepresentations Act 1967, and the Unfair Terms in Consumer Contracts Regulations Act.

Again, I would like to make it clear that I still dispute the accusation that I have acted illegally in cancelling my Virgin Active Gym membership and therefore I will not communicate with any third parties (debt collection agencies, solicitors or otherwise) with regards to my case from this point onwards, and I expect to be hearing in writing from someone in charge at Virgin Active addressing all of the points I have made in this letter in the near future. A copy of this letter is enclosed for your records (ARC) and I expect you to forward the other to Virgin Active. I will also be sending a copy to Sir Richard Branson as I think he would be interested to see the way some of his employees are acting in his company’s name.

Regards

[PGH7447]

go for it - keep us updated please

[Mariko123]

Hi there, I'm new to this site although I have been viewing comments about Virgin Active rolling contracts on it for some time.

 

I have a very similar situation to you Pedders 78. My story is;

 

I was a Virgin Active gym member for 17 months having joined in January 2008. I made the moves to cancel my gym membership via The virgin active website in June this year after having financial difficulties due to my husband having to work as a temp and I was fearful of losing my job - something had to give and the gym had to go. I didnt' think this would be a problem as I'd been informed by the sales person when I signed up that I was tied in for a year and after that I could cancel anytime as long as I gave 1 months notice. Turns out, as you know, this is not the case. I sent the cancellation via the website and cancelled my direct debit as it had just been taken and that would count as my one months notice. What followed has been 5 months of grief from Virgin Active. I am now receiving letters and calls from ARC and have just opened a lovely letter from their solicitor, Trevor Nunn.

 

I have explained to virgin, on the phone and via letter that I was misinformed with regard to their Diamond membership by their sales rep and that they have a duty of care to insure that their staff are trained properly. They have pretty much called me a liar. I am not disputing that I've signed the contract, although I did not receive one on the day I signed up or get sent one. I asked virgin to send me a copy as soon as this nonsense started. I've never been able to reach the manager at my gym, only her minions who have been beyond rude. I've been in contact with a gentleman called Danny who is a customer services representative, you wouldn't think so given his tone to me on the phone. I have mostly corresponded with him via letter, he has refused to acknowledge my complaint, about the sales rep who misold me and also the rudeness of staff on the phone.

 

I've spoken to the Citizens Advice Bureau, who couldn't really help me, Consumer direct who told me that yes, it was highly likely that Virgin Active's rolling contract would be considered unfair in a court of law but to keep paying them (go figure) and I've also printed out the OFT's guidelines to gym contacts. The OFT's guidlines are clear, rolling contracts would be considered unfair, even when signed.

 

In the letters that Danny from Virgin has sent me he has asked me to 'prove' that my husband had taken a paycut and that I had been made redunant only then would they consider allowing me to buy myself out of the contract. They also offered me this £7 freezing membership thing, which is pointless because you are still liable.

 

After explaining to them, on the phone and via letter that I was not made redundant but was fearful of redundancy they still asked me to prove this. I'm not sure how they expect me to do this and also it is highly inappropriate of them to ask this. When they finally understood I had not actually been made redundant they withdrew their potential offer of allowing me to buy myself out of the contract and informed me that I was liable for the total amount.

 

I have quoted from the OFT gym membership guidelines, informed them that I've spoken to Consumer Direct and they still refused to acknowledge that I was misold and I that don't actually have the money to pay them. I've even contacted watchdog (who are actually quite interested in what Virgin Active are upto..)

 

Oh and I also sent a letter to Richard Branson, highlighting the whole sorry situation and got a letter from his managment office saying they would get someone to contact me. Who then contacted me? good old Danny, the Customer Services rep. Wonderful. No joy there either.

 

Trevor Nunn are saying that I currently owe £289.75 with Total liability to the end of the contract being £393.65. Although by my calculations they've added on £30 to each of these totals.

 

My next move is to send the solicitors a letter, ccing Virgin refusing to acknowledge their request as I am currently in dispute with Virgin. Although, given that Virgin have quite literally washed their hands of me I'm not sure what this will achieve.

 

It has been the most frustrating experience I've ever had with a large corporation, and that is saying something! I refuse to let them bully me into paying without fighting tooth and nail first.

 

Do either of you know of anyone who has ever been taken to court by Virgin/ARC/Trevor Nunn?

 

Pedders78, have you heard anything back from your letter? I may use the same tact, I hadn't even thought about the VAT!

 

I think I'm now of the mind to say 'come and have a go if you think your hard enough' as well. I know they need to make their money somewhere but I cannot believe they are being such cowboys!!!

 

Do you guys have any idea of what I can do next? aside from picket the Virgin Active offices...

[PGH7447]

Hi and welcome mariko123.

 

You are doings the right thing by refusing to let them beat you down. The last letter I sent was the 29 Oct, now normally from previous letters I get an immediate response, o far zilch.

 

If trevor nunn and arc become heavy just write back saying account in dispute with virgin inactive and that you will not be dealing with them.

 

write to virgin and go down the vat route, as I stated in my post £54 minus vat does not = £54, so they have broken the contract and if they are that confident they havent I will see them in court.

[Pedders78]

Hi Mariko 123,

 

Welcome aboard!

 

I'm currently in the same boat as PGH7447 in as far as i haven't yet received a letter back addressing the VAT issues. I don't want to speak to soon, but i am fairly confident that they are pretty much screwed once you bring up the VAT issue, and i hope that i have heard the last of it!

 

I would definitely suggest going down the VAT route with them, and in the meantime reiterate that you dispute their claim and refuse to deal with a any third partys. Then you will only be dealing with Virgin Active staff - who are not trained in debt collecting and are basically just a bunch of plums who only passed P.E in school!

 

I still actually expect for them to dispute my claim, but then if you expect the worst, at least you get no nasty surprises down the line!

 

I'll continue to keep you posted.

 

All the best!!

[Mariko123]

Hi PGH7447 & Pedders 78,

 

I'm so pleased I've posted my story online, it's really helpful and not to mention, reasuring, that you are both having similar problems to me. I think I shall go down the VAT route as well, I'll send the letter to virgin ccing in [NAME REMOVED] so they know I've disputed it again and will hopefully leave me alone for the time being. I really don't want to deal with a third party and have no idea why we should be made to do that.

 

I have a colleague at work who studied contract law and she has told me this rolling contract business sounds dodgy. She also expressed surprise when I told her they'd passed it onto a debt collection agency. She's really busy at the moment but has promised to take a look at the contract and all my correspondence next week.

 

I'll keep updated as to what she says and also if I get anything back from Virgin/ARC/[NAME REMOVED] from my 'I will not deal with a third party/I'm in dispute with Virgin/what they hell about the VAT' letter!

 

Fingers crossed!

 

Keep me updated, goodluck!!!

Edited May 28, 2010 by alanfromderby

[PGH7447]

Update - Thursday 12 rcieved letter threatening DCA - bring it on

 

Today recieved letter saying fair cop gov, we will cancel, although this was not on the VAT issue but rather on my proving to them that I did not make a pro rata payment of 2 days. so my cancellation letter (which of course they did not get) was right

 

however I did not appreciate the tone of the letter that they are doing me a favour so I will be chasing for the extra month I paid by mistake.

[Mariko123]

that's excellent news!!! they are so rude aren't they, we are doing you favour! ha! you're doing them a favour by not taking them to the small claims court. Cheeky buggers that they are!

 

I'm going to send my letters on Monday so will keep you both updated!

[Pedders78]

Yeah, nice one PGH7447 that's consumer:1 - Virgin Active:0

[PGH7447]

thanks, and good luck in your case

[Pedders78]

O.k, i received a response from Virgin Active this morning basically trying to fob me off with regards to the VAT claim by saying that when they refer to the membership costs in the contract they refer to the gross cost not the net cost and that they are still basically going to pursue me for the outstanding "debt!"

 

As you may have guessed by now, i am not going to accept this and will continue to cite the VAT decrease and subsequent increase in membership dues as a valid reason for early termination of my contract. I have just sent them the following letter - let's see how they respond.

 

Dear Danny,

Re: Virgin Active Ltd – Account ****************

Thank you for your letter dated 12 November 2009 in which you have attempted to justify an increase in your membership dues and direct breach of your own terms and conditions (and one of many reasons for the early termination of my contract), as outlined in my previous letter.

You have stated in your letter that The Diamond Membership is a “special low-priced membership” which has a fixed price for life. This clearly refers to the net cost of the membership and not the gross cost as you have stated in your letter. Virgin Active has absolutely no say whatsoever with regards to Value Added Tax (this is a tax implemented by the government in case you are unaware) and as such the fixed price quoted in your terms and conditions can only refer to the net charges of the membership, which due to said VAT decrease in December 2008 was as stated before - increased as a result!

As I stated in my previous letter the increase in the membership dues is in direct contravention to clause 8.2 in your own contract which states that grounds for early termination of the contract by me are: “We increase your membership dues”, so as far as I am concerned the situation is that simple – you increased the membership dues illegally and I have cancelled my contract as per the terms and conditions of the contract!

Again I would reiterate that I dispute your claim and do not acknowledge any debt to your company and as such I will not deal with any third party employed by you to recover the “debt”! I would suggest that from this point you accept my reasons for early termination as being valid and cease the pursuit of any monies you believe you are owed as I simply will not pay unless ordered to do so by a county court.

I await you response

[PGH7447]

good one

[Mariko123]

well done.

 

I have had a similar letter back from ARC regarding my letter citing the VAT etc etc.

 

They have basically said, here is a copy of your contract, you've signed it, you must pay in 10 days.

 

Not on your nelly. I'm going to send another letter basically saying 'you have not read my original letter' etc and repeat again. I can't believe they are doing this to us.

 

Pedders 78, goodluck with the letter above, it sounds like perfect sense.

 

Let us know the outcome.

[PGH7447]

keep plugin away at them, they will get sick of it first

[Pedders78]

I dunno - i've been sick to the stomach with these f***ers for a long time already!

 

But we're fighting the good fight - it's already 1:0 to us, lets try to get 3:0!!

 

All the best guys - i'll keep you posted!

[Pedders78]

One other think Mariko 123, you say you have recieved this letter from ARC? They are not allowed to get involved in the actual dispute whether it be citing the vat or otherwise - this is between you and Virgin only! Reiterate that this is the case and that the case is in dispute - and tell them you will only deal with Virgin. They have to comply.

[PGH7447]

correct, virgin should not have passed it to the pondlife when it is in dispute, now ask them for thier official complaints procedure

[Mariko123]

hi guys, I've recieved a letter from Virgin Active, replying to my letters to Richard Branson. They have said that they have contacted ARC who are awaiting instruction from them.

 

They have said they are happy to waive the £30 fee that ARC put on their correspondence (how nice of them..) and I quote;

In regards to your comments regarding VAT, with Diamond memberships, we have committed to your price for the life of your membership. This means the price will not go up or down during the entirety of your membership, provided it is not cancelled. In reference to the Office of Fair Trading, within the terms and conditions is clause 8.1 whereby we have explained the rolling element of the contract along with the cancellation procedure in a simple and easy to understand manner. The guidance notes confirm that each term is judged on it's own merit and we are offering a significantly lower proce for your commitment to a further 12 months each time the contract renews.

 

They haven't properly addressed my concerns but that said, in an attempt ro resolve this matter, they are happy to offer me a 50% buy out clause where I would pay £181.82 and that would be that. They will write off the rest. Now, I don't believe I'm going to say this, but I think I'm going to pay it. I could trudge on and go for it again but they could then completely screw me for the whole lot. I've spoken to a colleague at work who studied legal contracts at university, and she has said that whilst the contract is grossly unfair and their letters from their customer service department are well below par the contract is legally binding and whilst I could win if it went to court, they could decide to make and example of me a fight tooth and nail. Now I very much doubt they would do that, I mean, I bother but saying that, I really do just want this issue to go away so I can open the post without worry of anymore chaser letters.

 

What do you both think, do you think I should pay or stick it out?

[Pedders78]

Hi Mariko123,

 

It's up to you - if you want it to just go away and your in a position where you can free up close to £200, then go ahead and pay them off.

 

I on the other hand have got nothing better to do - and i am going to fight it all the way!

 

I had also meant to post on this forum yesterday as i have also received a letter back from Virgin again skirting around the VAT issue, and saying that my details had been passed back to ARC for "collection". I have sent them back this letter:

 

 

Dear Danny,

 

Re: Virgin Active Ltd – Account *******************

 

Thank you for your letter dated 23rd November 2009 in which you have again attempted to justify an increase in your membership dues and direct breach of your own terms and conditions as outlined in my previous letters.

 

You have stated in your letter that my details have been passed back to ARC for formal debt recovery procedures, but I would like to remind you that I dispute your claim that I owe Virgin Active any monies as I believe you were in breach of clause 8.2 of your own contract, and as such until you prove that you were not in fact in breach of said clause of said contract, my case will continue to be in dispute, and while it is in dispute you are not allowed [by law] to pass this account to any third party’s.

 

I await you response

 

 

Regards

 

 

So - i will continue to reply to their letters citing the VAT increase, and asking that they prove (rather than just saying) that they weren't in breach of their contract - and that until they do - my account remains in dispute! Now i have no idea how this will go from here but i think i've got them by the short and curlies with this VAT issue - so lets see what they do!

 

At the end of the day if it goes to court and worse case, they win - then I'll pay them £1 a week or something!

 

I'm kinda enjoying it now - POWER TO THE PEOPLE!!

[PGH7447]

mariko - it is in the end up to you, but you are effectivley saying they are right but I do understand where you are coming from, so in the end it is a result of sorts.

 

pedders - keep fighting mate

[Mariko123]

mmm... I don't want to pay up but the thought of this business all going away is far to appealing. I'm going to have a bit more of a think on it.

Pedders - get the buggers.