Lifestyle Fitness & Credit Resolution Services

[CSM750]

Hi there, I wonder if anyone can help me with this issue please?

 

My Wife joined Lifestlye Fitness on a 12 month contract (Nothing was ever signed, although I believe thats irrelevant?) in August 2012. In June 2013 (10 Months later) she emailed the gym twice asking to cancel (due to a change in circumstances), to which no reply was ever received.

 

She therefore stopped the Direct Debit with two months left on the contract. I wish she hadnt done this as paying the two months would have been much easier

 

We then heard nothing else until November 2013 when 'Credit Resolution Services' sent a letter demanding £170+ for the 'debt'.

 

The monthly fee was £12.99, so this is made up of admin fees etc.

 

I wrote to them and offered to pay the remaining two months (£12.99 x 2 = £25.98.) but said we were unwilling to pay the massive fees.

 

They wrote (a rather patronising) letter last week, explaining how there fees were perfectly reasonable and were caused by 'people like my wife..'

 

HOWEVER: They did say they would take £80 as settlement as a 'goodwill gesture.'

 

Now, if it was me, I would just tell them to get lost as I have pretty poor credit anyway, however my wife has an otherwise spotless credit history, which I am very anxious to keep.

 

Are we better just paying the £80? I'd rather not out of principle, but I'd rather keep her credit file clean.

 

Would a gym membership show on a credit report even though its not a credit account?.

 

Thanks for your help.

[dx100uk]

moved you to the gym forum.

 

the answers are here

 

http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?260-Gyms-and-Health-Clubs

 

just read a few threads with CRS in the title

 

 

dx

[slick132]

Hi CSM,

 

CRS are just Harlands (gym admin co.) wearing their DCA hat ! They operate from the same offices and just swap the paper in the typewriter.

 

The good news is that gyms generally tend not to report info the CRA's these days. This has been the case since The OFT v AMSL was heard in the High Court in 2011 - http://www.consumeractiongroup.co.uk/forum/showthread.php?320766-Ashbourne-Management-Services-Ltd-Contracts-longer-than-12-months(1-Viewing)-nbsp

 

Our advice is always to challenge any admin charges levied on gym agreements on the basis that they are unenforceable penalties. I would certainly NOT pay them the £80 compromise offer, or indeed anything just yet. It may be that YW had decent grounds to cancel.

 

Before I suggest how to proceed, can you tell us what the "change of circumstances" was, which prompted YW to cancel.

 

Ignore all communications from Harlands/CRS. If they call you, tell them to put anything in writing only.

 

[CSM750]

Thanks so much for replying!

 

The change of circumstances was just a promotion at work + longer hours etc, nothing too compelling unfortunately.

 

It's a 2 page letter, in which they detail how they believe their charges are fair and "proven by numerous court cases"

[Bazooka Boo]

Ignore them, pay the Gym the last two months, not the tin pot CRS/Harlands or whatever else they are calling themselves this week,

then send a copy of their very puerile letter to the Gym, OFT, and TS.

 

I would like to see exactly what 'numerous court cases' have 'proved' their unenforceable and unlawful charges have been declared fair!

Absolutely unbelievable! Seems like this is going to be the year of stupid statements...

[slick132]

In their dreams !! They don't take cases to court.

 

I suggest you write to the gym :-

 

Dear sir or madam,

 

I refer to your letter of xxdate.

 

Your demand for over £170 is ludicrous, as is your Goodwill Gesture to accept £80.

 

I realise I should have finished paying for the minimum 12 months before cancelling my DD mandate although this happened because the gym failed to respond properly to my emails about cancelling.

 

In the circumstances, I am prepared to pay you the remaining balance of £25.98 but I will not pay your admin fees which are unenforceable penalties.

 

If you confirm in writing that you will accept £25.98 in full settlement of all monies due to you, I will pay it promptly.

 

If you fail to accept my offer within 14 days or you insist that I pay more, my offer will be withdrawn and I will pay you nothing.

 

Yours faithfully,

 

[Bazooka Boo]

Thats the one brilliant!

[CSM750]

Well, they finally decided us worthy of a reply two months later.

 

"Further to your email of 4th February 2014, we apologise for the delay in our reply.

 

We must advise that we do not believe the fact that you have simply repeated for a second time your opinion that our charges are unenforceable,

without any justification for this belief, sufficiently counters the terms of your agreement we have quoted to you or the relevant guidance issued by the Office of Fair Trading

on such matters or our years of experiencing the contrary to be true (as explained already).

 

There is no justifiable reason why Lifestyle Fitness or its agents should bear the costs of your breach of contract

and as such, as you may suspect, we do not accept your offer of £25.98 as sufficient.

 

We shall once again extend the offer of £79.49 as final settlement, if paid within 10 days.

 

Should we not hear from you, or should you advise us again that you do not intend to pay more than £25.98,

we will continue our collection procedure for the full balance of £165.49,

but will not continue to enter into further correspondence as our decision has been made.

 

Please ensure payment or a response is received by us within the next 10 days, in order to avoid further action being taken against you.

 

Yours sincerely,

 

David Castle

 

Collections Department"

 

I'm starting to dislike this David Castle person.

[Bazooka Boo]

Ha ha ha ha ha ha ha ha ha ha ha ha ha.....my god they're desperate!

 

Not in their wildest dreams does a breach of contract cost anyone anything, least of all the amount they are attempting to extort!

 

Perfect proof of letter tennis and just how immature they are wanting to have the last word.

Although not one to be outdone and always wanting to have the last word myself, a simple;

'' My offer of £25.98 was final and non negotiable, no further correspondence will be entered into, any further correspondence you may wish to send will be returned to sender and a diary of harassment will be logged so as to report you to my local constabulary for the criminal offence of harassment.''

[slick132]

Hi CSM,

 

I was inclined to ignore the letter. However, perhaps a final reply to make your position clear :-

 

I refer to your letter of xxdate.

 

Despite your assertion that you have the backing of The OFT and numerous court cases, I maintain that your admin charges are unlawful penalties. I have neither the need nor the inclination to explain the reasons for my contentions at this time. Should you decide to litigate, I will produce the necessary legal arguments and case law when required.

 

You chose to ignore my offer despite my clear indication that it was time-limited. The offer is now withdrawn and I will pay you nothing more.

 

I reserve the right to ignore further communications from you although they may be reported to The FOS as a formal complaint.

 

Edited June 18, 2014 by slick132
typo

[CSM750]

i was wondering if someone could take a look and see if I need to be worried,

 

I'll include the email exchange I've had with the guys at CRS recently.

 

ME:

 

Dear Nick Bright,

 

Thankyou for your letter dated 22.04.14, the contents of which have been noted.

 

You claim that you wish to come to an amicable solution, so therefore let me reiterate my offer of £xx.xxfor the final two months fees.

 

Thankyou for your kind explanation of the legal process involved in small claims court. Could you possibly provide me with a true copy of the agreement which I signed with yourselves and which you will be presumably be basing your court claim on? I would rather have it now than have to wait to request it under CPR procedures.

 

I am happy to pay £xx.xx as full and final settlement by bank transfer, online, or cash into an account of your choosing.

 

Please let me have your response within 10 days, either by letter, or by return email to this address.

 

 

 

THEM

 

Further to your email of 24th April 2014,

we are unable to provide you with a signed copy of your minimum term membership agreement,

as this was entered into via an online sign up process called SNAP and as such, no signed physical document exists.

 

We assure you, however, that despite this, it remains a legally binding agreement, and to our knowledge is fully enforceable.

 

We have, however, sent in the post a copy of the terms and conditions of that agreement,

as well as all of the information transmitted from the website at the time of joining,

including the personal details you supplied (highlighted in green) and the product information supplied to you (highlighted in yellow).

 

As previously explained, your offer of £xx.xx is not acceptable as final settlement of this balance,

as there is no reason why the costs incurred in trying to rectify your breach of contract should be covered by any party other than you.

 

Payment can be made by Credit/Debit card by calling us on 01444 449165.

Alternatively, cheque/postal orders should be made payable to Credit Resolution Services and sent to CRS,

2nd Floor, Rockwood House, 9-17 Perrymount Road, Haywards Heath, West Sussex, RH16 3TW.

 

A payment plan can also be set up if you are unable to settle in full, although we do charge a little extra for this.

 

If you are experiencing financial difficulty, there are organisations who offer free debt advice and assistance such as Step Change (0800 1381111),

National Debtline (0808 8084000) and your local Citizen Advice Bureau.

 

Please ensure a payment or response is received within the next 7 days, so we can avoid further action being taken.

 

Yours sincerely,

 

David Castle

 

 

 

 

ME:

 

Thankyou for your eventual reply to my email sent at the end of April. You will notice that I am replying to yours within your arbitrary 10 day deadline.

 

I am a little perplexed at your reasoning for claiming such a large amount.

 

I was under the impression that fees and penalty charges could only be decided / added to a debt by a court,

and not by a debt collection agency such as yourselves?

 

Again, I am happy to pay the £xx.xx for the remaining 2 months membership, but I will not pay your fees and penalty charges.

 

I really cannot make it any plainer for you than this.

 

We're obviously not getting anywhere with this exchange,

as I am still not intimidated by you or your company,

which I can only assume is what you are trying to do here?

 

Perhaps you could issue a claim against me through small claims court

so we can get the final resolution that you seem so confident in?

 

https://www.gov.uk/make-money-claim-online

 

That is the web address I believe you will be requiring.

 

I look forward to reading your justification for your assorted "admin charges."

 

I would ask you to reply within a deadline, but it seems a little pointless.

 

 

 

THEM:

 

Further to your email of 21st May 2014, we apologise for the delay in our reply.

 

With regards to your statement that you were "under the impression that fees and penalty charges could only be decided / added to a debt by a court,

and not by a debt collection agency such as yourselves?"

you are unfortunately mistaken.

 

If this matter were escalated to court the judge would indeed have the right to decide whether or not these charges were due,

but they would also have the right to decide whether any aspect of the balance claimed was due

and that would be true of every claim of any kind.

 

That is the very reason judges are employed to deal with such matters; to make a judgement.

 

This in no way diminishes the ability, or indeed the responsibility, of parties to set out what they believe is owed

before court level as this is in fact a requirement of the Civil Procedure Rules 1998.

 

You have advised you look forward to our justification of our charges and so we shall advise,

much as we did in our letter of 30th December 2013, that Clause 6 of the terms of this agreement,

which you have agreed to be bound by, states that

 

"If you fail to pay any monies due under this agreement or if any Direct Debit is returned unpaid or any cheque is returned unpaid

or if any other form of payment is not honoured for whatever reason,

you shall pay us on demand an administration fee of £20

(which we require to cover our costs of seeking to pursue such payment from you)."

 

Harlands deal with many health clubs and other businesses across the UK and Ireland.

The monthly fees are determined by the individual business and can vary from as little as £5.00 per month to as much as £1100,

per month depending on the business.

 

The administration charge of £20.00 is paid to Harlands and is £20.00 across the board,

as the administrative process they follow is the same regardless of the fees due to the club.

 

As Harlands are employed by the club to administer the agreement, these costs can acceptably be considered the responsibility

of the consumer if they breach the contract, especially since they have signed to agree to be liable for those costs.

 

As you may be aware, whilst common contract law does not allow punitive charges in relation to financial agreements

it is entirely possible and acceptable for either party to apply charges payable by the second party,

to cover costs incurred by the first party due to a breach of contract on the part of the second party.

 

£20.00 is the amount deemed by Harlands' directors as representative of their costs in dealing with the administration involved

with a missed or returned payment.

 

When they submit for a payment by Direct Debit which is then returned, they are charged by the bank.

This amount does not amount to £20.00, however, and we concede that the cost of the paper,

envelope and franking of the default letters does not make up the entirety of the rest of the sum,

 

however, as a business they have to pay overheads for staff wages,

whose employment would not otherwise be required if it were not for the missed or returned payments and furthermore

pay overheads for office space and increased usage of utilities, equipment, furniture and stationary to accommodate

these staff and the processes involved with the administration involved with missed or returned payments,

costing hundreds of thousands of pounds every year.

 

It is our position, therefore, that all of these costs are incurred as a direct result of a breach of contract by those who default on their agreements,

which, in this instance, is you.

 

With regards to our own collection fees, we work under the guidance of the Financial Conduct Authority (FCA),

and are fully confident that our own collection fees are in line with that guidance.

 

To demonstrate the validity of these recovery fees we would refer you to the specific points within the current version

of the guidance which states the following with regards to charging consumer's for debt recovery:

 

"CONC 7.7.2

01/04/2014

FCA

A firm must not claim the costs of recovering a debt from a customer if it has no contractual right to claim such costs."

 

Reference to clause 8 of the terms of your agreement will show that you have agreed that

"If you fail to pay any amount due under this agreement for a period of more than thirty days,

then we may pass the debt to a third party company for collection.

The reasonable and direct costs incurred in employing the third party company will be borne by you including costs in tracing you

if you have changed your address without telling us." As such there is such a contractual right to claim such costs.

 

"CONC 7.7.3

01/04/2014

FCA

A firm must not cause a customer to believe that the customer is legally liable to pay the costs of recovery where no such obligation exists."

 

It has been demonstrated that there is such a contractual provision and as such you are liable for such charges and stating as such is not misleading you.

 

"CONC 7.7.4

01/04/2014

FCA

Where a firm has a contractual right to levy default charges,

a regulated credit agreement must state the charges and the conditions for making the charge under, as the case may be,

the Consumer Credit (Agreements) Regulations 2010 (SI 2010/1014) or the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553)."

 

Your agreement is not a credit agreement, therefore this would not apply in this instance.

 

"CONC 7.7.5

01/04/2014

FCA

A firm must not impose charges on customers in default or arrears difficulties unless the charges are no higher than necessary to cover the reasonable costs of the firm."

 

This agreement is not with us, but between you and Lifestyle Fitness, the debt has not been bought by ourselves,

and we act as an agent on their behalf. This is not, therefore, the cost of transferring your details to ourselves,

or the cost of our phone calls or letters, but the cost to Lifestyle Fitness for employing our services as a debt collection agency.

 

As this is the actual cost of employing our services, it is 100% representative of Lifestyle Fitness' costs.

 

As explained previously, and repeatedly, your offer of £xx.xx is not sufficient. Our position remains as previously advised.

 

If you are not willing to set up a payment plan with us, we have no alternative but to proceed with further action against you.

 

We will hold this for a further 7 days. If you advise us again that you do not intend to pay,

we will continue our collection procedure, but will not continue to enter into further correspondence as our decision has been made.

 

Payment can be made by Credit/Debit card by calling us on 01444 449165.

 

Alternatively, cheque/postal orders should be made payable to Credit Resolution Services and sent to CRS,

 

2nd Floor, Rockwood House, 9-17 Perrymount Road, Haywards Heath, West Sussex, RH16 3TW.

 

A payment plan can also be set up if you are unable to settle in full, although we do charge a little extra for this.

 

If you are experiencing financial difficulty, there are organisations who offer free debt advice and

assistance such as Step Change (0800 1381111), National Debtline (0808 8084000) and your local Citizen Advice Bureau.

 

Please ensure a payment or response is received within the next 7 days, so we can avoid further action being taken.

 

Yours

 

 

 

 

 

 

They seem very intent in writing long emails to get their money. But I've offered them the remaining balance so many times now, I'm getting bored.

[renegadeimp]

Do what Slick said previously. Withdraw the offer, report them and ignore them.

[CSM750]

That's my plan, am I right in thinking that the charges and admin fees are unenforcable?

[dx100uk]

the FCA's predecessor, the FSA clearly stated that any fixed sum PENALTY fees is UNLAWFUL!!

 

regardless to its level.

 

as for the reast of it

 

unter bowlarks

 

please ignore them!!!

 

dx

[CSM750]

I had an inkling, always good to have you guys confirm it, thanks for your help

[slick132]

Hi CSM,

 

You should have stuck to the advice earlier and withdrawn your offer. By continuing to communicate with them and re-iterating your offer (that should have be withdrawn), you encourage them to continue to try and wear you down.

 

Their admin fees are effectively penalties as we've said all along and nothing that CRS says can change that.

 

Simply write to them now and say you refuse to pay them anything more and you will not enter into further communication in the matter.

 

The chance of them taking such a case any further is very remote and, if that happened, we'll be happy to assist you in defending vigorously.

 

Send the final letter or email and then let us know how they respond. But I strongly suggest you do NOT continue to exchange letters or emails as you have done - CRS are happy to play "the long game" !!

 

Edited June 18, 2014 by slick132

[CSM750]

Hi CSM,

 

You should have stuck to the advice earlier and withdrawn your offer. By continuing to communicate with them and re-iterating your offer (that should have be withdrawn), you encourage them to continue to try and wear you down.

 

Their admin fees are effectively penalties as we've said all along and nothing that CRS says can change that.

 

Simply write to them now and say you refuse to pay them anything more and you will not enter into further communication in the matter.

 

The chance of them taking such a case any further is very remote and, if that happened, we'll be happy to assist you in defending vigorously.

 

Send the final letter or email and then let us know how they respond. But I strongly suggest you do NOT continue to exchange letters or emails as you have done - CRS are happy to play "the long game" !!

 

 

You're right of course

 

I will write to them later.

 

They just really got to me! Which I suppose is what they want.

 

Thanks for you're help!

[slick132]

Exactly, they keep on in the hope they'll worry you into communicating and paying.

 

Folk sometimes wonder why the letters I draft to gyms and their Admin Co's or DCA's are strongly worded. It's because anything more polite just encourages them to continue with spouting their rubbish and bullying tactics.

 

And I have to say from experience, Harlands and CRS seem more than willing to write page after page of garbage in the hope that you don't notice that a lot of what they say is plain wrong and/or inappropriate.

 

Harden up and ignore them, unless we suggest otherwise.