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I would be grateful if anyone here can give me a brief outline of the actual law relating to gym's that attempt to charge an administration fee (£25.00)? Am I correct in saying that this is legally defined as a penalty fee and therefore unlawful and can be safely ignored?

 

Thanks in advance for any help provided. And might I say what a wonderful resource this forum is. All power to your elbow.

 

Dubs

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Yep under FCA rules

What's the full story please

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Hi Dubs and welcome to CAG

 

You give little detail so I can only reply in general terms.

 

The lawfulness of admin fees charged by gyms or their admin Co's was not determined in the 2011 case brought by the OFT against AMSL. See here - http://www.consumeractiongroup.co.uk/forum/showthread.php?320766-Ashbourne-Management-Services-Ltd-Contracts-longer-than-12-months

 

However, we ALWAYS tell folk to challenge admin fees and NOT pay them.

 

We need more info if we're to help you more specifically.

 

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Thanks, both of you. I really appreciate what you do here.

 

I've been fighting Bannatyne's over a cancellation of membership.

 

I have sorted out the main part albeit after what seems to be the usual protracted resistance and BS, and only have the admin fees issue left to sort (they argued that I had to pay an extra month's membership fee in addition to the one month's notice I gave them, but I've seen them off on this nonsensical argument)

 

I have told them that under the terms of their contract

- which states that I must pay a "reasonable administration charge"

- that £25.00 is unreasonable.

 

I offered them £5.00 which they have rejected.

They argue in justification that they had to read my doctors letter (cancellation under medical grounds).

 

I have responded that the letter consisted only of 26 words, which took approx 5 seconds to read and that they are de facto charging £1.00 a word - or £18,000.00 an hour for a relatively poorly paid admin assistant to read material, and that this was exorbitant and that no court in the country would consider such an exotic charge either fair or reasonable.

 

That's where it stands.

 

This has all been by email and yes, they do seem to engage in what you have described elsewhere on this forum as "email ping pong", always having a different person responding to emails I send them, so as to confuse things and ensure there is no easy audit trail and, I imagine, to engage in some smoke and mirrors. They seem well versed in these techniques.

 

I don't intend to pay anything more than £5.00 and am happy for them to take me to the small claims court if they wish, where I shall argue my case.

 

However, I suspect they don't wan't to do that for several reasons, not least because the judge in such a case will make a ruling which will set precedent for the health and fitness sector - if not for all English business sectors.

 

I further suspect that they purposefully use the vague term "reasonable" in their T & C's to ethically bludgeon people into paying what I regard as a scandalous sum for cancelling membership.

 

My guess is that the last thing they want is to have the amount clearly determined in a court of law, because I suspect that should any of this go to court a judge would rule that a sum of £5.00 was reasonable and that would bring an end to what I consider to be an illicit and reprehensible income stream for Bannatyne's and other business entities (if not sectors) to impose on ordinary people for basically doing nowt.

 

I think the foregoing pretty much outlines the main points of my situation.

 

Dubs

 

Oddly enough, I've just read a reply from Bannatyne's (sent last night) where they have agreed to waive the admin charge in order to settle the matter "amicably".

 

It seems that my arguments for them to elevate the matter to court as the final arbiter were persuasive. The £18,000 per hour "reading" charge was the wooden stake in their heart I imagine. Anyway the ping-pong game has ended.

 

However, I would still appreciate your thoughts on my foregoing post for future reference. Businesses should not be allowed to engage in this sort of bullying and coercion.

 

Dubs

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No admin fee is lawful

The FCA has clearly ruled on that

 

Doesn't matter what is written in any t&c's.

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Share on other sites

Btw, Bannatyne's insisted upon having a GP letter confirming that there were health grounds to terminate membership. I provided one and regret doing that now.

 

Subsequently, I looked at the OFT /decision / ruling in this regard and there is no such requirement stated on their part. Therefore this is purely a Bannatyne's addition, which is why they include this clause in brackets in their T & Cs numbered 6 (f). (see their website for T & Cs 12 month contract).

 

Inasmuch as GP's charge patients to write letters (in this case £35.00), I would recommend no one agree to this stipulation in future as I believe all that is necessary to do is self certify health grounds - this is not school after all, and adults have been able to self certify sickness at work for decades. Let Bannatyne's whistle for a GP letter; it's a stipulation they can't enforce.

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No admin fee is lawful

The FCA has clearly ruled on that

 

Doesn't matter what is written in any t&c's.

 

Thanks dx100. Can you provide a link or a page where I can read the FCA ruling on this please?

 

I looked at the FCA website and the only thing I could find was that they regarded bank charges as "unnecessary", which is quite a cunning way of cloaking the real meaning, and I guess that form of words was carefully chosen for the benefit of businesses -- in that "unnecessary" means not necessary, which means it is not enforceable in law -- but stated without being explicit about it.

 

It' all seems to be designedly jargonized to cause confusion and uncertainty amongst the public who everyone knows continue to be bamboozled into paying charges that they don't have to pay.

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See most slick132 posts

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Share on other sites
See most slick132 posts

 

Thanks dx. I've read many of Slick's excellent post already, but there seem to be thousands of them. All I want, really, is pointing to case law or the OFT or FCA's webpage where they ruled that admin fees are penalty fees and therefore unlawful.

 

Sorry to be a stickler and a bit anal about this, but I like to have all the facts to hand for use in future situations should one ever arise. Once bitten twice shy and all that.

 

Thanks again,

 

Dubs

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the link is in post 3 already now I'm on a big screen and I can see the whole thread!!

 

 

dx

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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the link is in post 3 already now I'm on a big screen and I can see the whole thread!!

 

 

dx

 

I've read the linked thread and the associated links but can see nothing to do with the lawfulness or unlawfulness of administration charges / penalty charges. The ruling in the Ashbourne case principally appears to relate to contracts longer than 12 months.

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Hi Dubs,

 

I think you're overdoing this a bit, or at least overthinking it.

 

You'd do better simply ignoring demands from the gym and let them do the running. Easy for us to say now, but probably true.

 

Arguing with the gym about aspects of the dispute means you continue to engage with them, which is what they want. It keeps them hoping.

 

If they took you to court (highly unlikely !!), any ruling on the Small Claims Track of the County Court system would NOT set any precedent for similar cases.

 

My advice would be to write (email) the gym saying you've spent enough time on this and, if they continue to harass you, you'll make formal complaints to The CMA and Trading Standards; and you'll also ignore all further communications from them.

 

Re comments about the FCA, I'm not sure what they've determined about the lawfulness of admin fees in this context. But I would NOT bother arguing the toss about it with the gym.

 

I suggest you ignore the gym after writing to them as I suggest above. Research all you want about the lawfulness of admin fees but don't waste time discussing it with Bannatynes

 

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Thanks Slick. As I mentioned in post No. 4 above Bannatyne's have now waived the administration charge and the matter is now closed. It seems my arguments, though complex, were effective.

 

Everything after that post is me trying to establish what the actual law is regarding administration fees -- are they penalty fees? - and asking to be linked to the relevant ruling so that I can read it.

 

I appreciate you taking the time to respond and for your guidance and expertise.

 

Dubs

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Hi Dubs,

 

There's no ruling about gym admin fees. As I said above, the AMSL ruling didn't address the lawfulness of the admin fees.

 

The lawfulness of default fees on loan a/c's, catalogue a/c's and credit card a/c's was addressed by the OFT years back.

 

See **BC WON** threads in the Barclays Successes forum. They'll show info about the arguments used to reclaim admin (penalty) fees.

 

:-)

We could do with some help from you

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EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

                                            Have we helped you ...?  Please Donate button to the Consumer Action Group

 

Please give something if you can. We all give our time free of charge but the site has bills to pay.

 

Thanks !:-)

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Just for the record and for others who may face a similar situation, I note the following after some research on unfair contract terms and Consumer Regulation (lawresources.co.uk/Unfair Terms - Regulation by statute - Unfair Contract Terms Act 1977 and Unfair Terms in Consumer Contract Regulations 1999)

 

 

The Reasonable Test.

 

S.11 - The reasonableness test

 

 

The term is required to be a fair and reasonable one to include in the contract.

 

This is judged by all the circumstance which were known, or ought to have been known or in the contemplation of the parties

 

The fairness and reasonableness is decided at the time the contract is entered - not with hindsight knowing of the events which in fact occurred

 

Where the term is restricting rather than excluding liability regard is to be had to the resources of the party seeking to rely on the term and the availability of insurance.

 

The burden is on the party seeking to enforce the term to show that it was fair and reasonable.

 

I have italicised the last para to highlight that it the party seeking to enforce the contract that has the burden to show it to be fair and reasonable.

 

In other words, in the case of Bannatyne's trying to charge £25.00 admin fee to terminate membership under medical grounds by reading a doctor's letter of consisting of 26 words, it would be their burden to prove this amount was fair and reasonable. Since, in this case, it would constitute an hourly charge of £18,000, there wasn't a chance in hell any English court would rule that to be fair or reasonable. Consequently, Bannatyne's decided to throw the towel in and waive their charge and close the matter.

 

Others might also benefit from making use of the Unreasonable Test in regard to the £25.00 admin charge. I very doubt Bannatyne's would ever test this charge in court anyway.

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