Next Generation Gym Charging 3 Months Fee for Leaving

[Will Scarlet]

Hi,

Can anyone tell me if the UTCCR 1999 would cover a contract I signed for a family gym membership?

Like a large percentage of the population I joined a gym and never really went so recently cancelled my agreement. To my horror they want to charge me £360 (£120 x 3 months) for terminating my contract.

In my opinion this cancellation fee is way in excess of the actual cost of terminating my agreement so can be seen as a "penalty".

I am going to send them a rude letter quoting the UTCCR just to see if I can get away with it anyway but was just wondering if I am right to do so.

Any ideas anyone?

[chesham]

Have you got a copy of the terms and conditions which you can refer to? Most of the agreements provided by gyms and health clubs will have a clause which refers to the cancellation of the contracts. It is true to say that this is a penalty rather than liquidated damages, and so in theory could be seen to be unlawful and unenforceable.

[Will Scarlet]

Hi, thanks for your reply.

The T&C's (or Membership Key Points as they are described) are, in my opinion, not very enforceable (I am not a lawyer I hasten to add).

Relevant to my case are the following.

"The initial term of membership is for a minimum of twelve months. Membership cannot be terminated or suspended in this period.

To arrange cancellation of membership, a cancellation request form must be obtained from the membership manager. Three calander months notice is required to cancel membership. This will be taken from the 1st of the following calender month from when the form is completed and returned to the membership department. Membership cancellation is only authorised after the completion of the initial membership term".

I joined the club in Sept '04 at the rate of £120 per month for a family membership so the first 12 months has long gone.

However, my gut feeling is that 3 months or £360 in "termination fees" is way beyond their liquidated loss for losing me as a member and is irrecoverable at common law as it can only be viewed as a penalty.

I delivered the following letter to them today, by hand and await to see if they dare grace me with a reply.

 

Re: Membership Contract CB6815 – Tim Harrow & Cat Conkey

 

I am in receipt of your letter dated 10th November, its’ contents are noted.

 

I now understand that the termination ’fee’ which you have applied to my account in relation to my breach is unlawful at Common Law, Statute and according to The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

 

If you say that it is not, then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put by as a result of my breach, in order to reassure me that your penalties really do reflect your costs.

I would draw your attention to the terms of the contract, which you agreed to at the time where it is an implied term of that contract that you would conduct yourselves lawfully and in a manner, which complies with UK law.

 

You insist you can impose charges in accordance with the terms and conditions of the contract. However, those terms and conditions are subject to the Common Law and the UTCCR. Indeed, the UTCCR takes precedence over any contractual term where the court finds a term to be ‘unfair’. The court can then treat that term of contract as having no legal effect.

 

I am also of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co. Ltd (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual liquidated losses incurred from a breach of contract. This is also the position in English Law: Dunlop Pneumatic Tyre Co. v New Garage & Motor Co. Ltd (1915) AC 79.

 

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. On the basis that my termination requires a simple computer procedure that respectfully would in reality, cost no more than £1 to carry out, I have enclosed £1 in full settlement of my account with you.

If I have not heard from you within the next 7 days I will consider this matter closed.

 

Yours Faithfully,

 

I'll let you know how I get on......

[tuscanrotti]

Just to say what a classic letter you have written there, hope it works for you, it brought a smile to my face.

I am having similar problems with Living Well they are threatening to take me to court after they misrepresented their membership contract which I signed after being told there was no sign in period. I have cancelled the contract but they are asking me to pay £655.00 in what would be future fees and £140.00 in court costs. If it ever gets to court will let you know how it went. It really is scandalous how they can take you to court for money for a service which you havnt had yet or intend to use.

 

good luck

tuscanny

[StudentInDebt]

As a cautionary note and I'm not a lawyer either - you are giving notice of termination of the contract you are not in breach of it, so the question of penalties and liquidated losses may not be applicable. As you have to give 3 months notice rather than having 3 months worth of fees charged this might not be seen as penalty either (although you could argue that it is masking the penalty), you presumably have full access to the gym during the 3 months.

 

You could argue that the 3 month term is not in accordance with the UTCRRs in that they are being unjustly enriched by insisting on this length of notice period therefore the term is not applicable.

[tuscanrotti]

Just to update you. I received a letter this morning from Living Wells Solicitors stating that they have decided not to take the matter any further !!!! I only emailed my letter to them late yesterday afternoon so they have obviously taken my letter very serious.

 

My attitude with them was let them take you to court then defend it, they probably will not go down that road as it costs them more money to get a case to court than the amount they are trying to collect. I really think that your letter will work.

 

Good Luck

Tuscanny.

[Bunners]

Hi, thanks for your reply.

The T&C's (or Membership Key Points as they are described) are, in my opinion, not very enforceable (I am not a lawyer I hasten to add).

Relevant to my case are the following.

"The initial term of membership is for a minimum of twelve months. Membership cannot be terminated or suspended in this period.

To arrange cancellation of membership, a cancellation request form must be obtained from the membership manager. Three calander months notice is required to cancel membership. This will be taken from the 1st of the following calender month from when the form is completed and returned to the membership department. Membership cancellation is only authorised after the completion of the initial membership term".

I joined the club in Sept '04 at the rate of £120 per month for a family membership so the first 12 months has long gone.

However, my gut feeling is that 3 months or £360 in "termination fees" is way beyond their liquidated loss for losing me as a member and is irrecoverable at common law as it can only be viewed as a penalty.

I delivered the following letter to them today, by hand and await to see if they dare grace me with a reply.

 

Re: Membership Contract CB6815 – Tim Harrow & Cat Conkey

 

I am in receipt of your letter dated 10th November, its’ contents are noted.

 

I now understand that the termination ’fee’ which you have applied to my account in relation to my breach is unlawful at Common Law, Statute and according to The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

 

If you say that it is not, then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put by as a result of my breach, in order to reassure me that your penalties really do reflect your costs.

I would draw your attention to the terms of the contract, which you agreed to at the time where it is an implied term of that contract that you would conduct yourselves lawfully and in a manner, which complies with UK law.

 

You insist you can impose charges in accordance with the terms and conditions of the contract. However, those terms and conditions are subject to the Common Law and the UTCCR. Indeed, the UTCCR takes precedence over any contractual term where the court finds a term to be ‘unfair’. The court can then treat that term of contract as having no legal effect.

 

I am also of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co. Ltd (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual liquidated losses incurred from a breach of contract. This is also the position in English Law: Dunlop Pneumatic Tyre Co. v New Garage & Motor Co. Ltd (1915) AC 79.

 

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. On the basis that my termination requires a simple computer procedure that respectfully would in reality, cost no more than £1 to carry out, I have enclosed £1 in full settlement of my account with you.

If I have not heard from you within the next 7 days I will consider this matter closed.

 

Yours Faithfully,

 

I'll let you know how I get on......

 

Hiya

 

Im having a similar problem now, was this one resolved in anyway.

Thanks for your help

Bunners

[jampot]

I'd be interested to hear as well. I'm about to resign my Next Generation membership.

 

If they claim to provide the services for the remaining 3 months, I guess they can enforce the charge for them. But if you feel 3 months is unfair (perhaps you are moving away from the gym and can't use them?) then perhaps offer 1 month and see what they say...

[rosiecotton]

They can indeed include a term stating that three months cancellation is required and if you have signed up to this, you're bound to it.

 

However - this was bandied about in a consumer affairs group I am in recently - and the query was that the calendar months really should start when notice is given, not on the 1st of the subsequent month. This term was generally felt to be unreasonable.

[Will Scarlet]

Bunners - I sent the letter I copied on the website and within a week had a letter from a debt collector!

Whilst I was happy to give it a go hoping that they would cave, I do not have the time to get involved with "yet another case" so I stumped up the £400 and retreated with my tail between my legs.

Sorry not to have better news.

[Bunners]

Bunners - I sent the letter I copied on the website and within a week had a letter from a debt collector!

Whilst I was happy to give it a go hoping that they would cave, I do not have the time to get involved with "yet another case" so I stumped up the £400 and retreated with my tail between my legs.

Sorry not to have better news.

 

Thanks for the reply, sorry you didnt get better news as well:sad:

[poodge]

I have a slightly different problem. I lost my job last year and cannot pay the charges at David Lloyd. I have asked for my membership to be frozen but they require 3 months notice (the same as if I was to cancel). So after sending them a polite letter saying I had no money to pay them I cancelled my DD with the bank. So now I cannot use the Gym as I havent paid my monthly gym fees. In addition if DL dont get the money next month they will pass the debt onto a debt collection agency.

 

Im miffed

[chocolatte]

They can indeed include a term stating that three months cancellation is required and if you have signed up to this, you're bound to it.

 

However - this was bandied about in a consumer affairs group I am in recently - and the query was that the calendar months really should start when notice is given, not on the 1st of the subsequent month. This term was generally felt to be unreasonable.

Same as the banks getting you to sign up to their ludicrous T&C, when she signed up, she was not aware that what they were charging her for cancellation was unlawful, therefore she can recalim it?

[Filthy Monkey]

My girlfriend has had a similar problem with David Lloyd. She moved in with me last year and gave DL the required notice that she was leaving - I typed the letter, she handed it in. However, 15 months later we have just had some mail forwarded from her old property stating that a judgement has been entered in default against her by DL because, according to them, she left without giving any notice! I am raging with them!!!

 

On the bright side, as details of the hearing were sent to her old address we should be able to have it set aside so she can have the opportunity to defend it. Now, does anyone know how to have a CCJ set aside…?

[Rob S]

There is a form (N244) you can get from the county court. Just fill it in and submit it. There is a fee of £65 to do this. This link should be of assistance:-

 

National Debtline England & Wales | Debt Advice | Factsheet 12 How To Set Aside A Judgment In The County Court

[jampot]

As a followup question - Next Gen's T&C allow them to cancel the membership with 30 days notice. Is it "unfair, therefore to have what amounts to THREE TIMES this notice required from a member?

 

Furthermore, they have a Force Majeure clause. This includes members as well as themselves. I wonder if I could suggest that there has been a delay in me cancelling my membership due to an "Act of God", and I would have submitted my cancellation 2 months ago otherwise...

 

I'm happy to give them 1 month's money, but 3 months is excessive in my opinion.

 

Thoughts?

[Rob S]

These gyms demanding 3 months notice to cancel membership reminds me of a time not that long ago when mobile phone companies also demanded 3 months notice to cancel a contract. They were forced to change that term ( by the OFT I think) so I don't see there is any difference with the gyms. Perhaps you could write back and advise them that as they only need to give you 30 days notice to cancel that it is unfair for them to expect 90 days notice and it is a breach of the unfair terms in consumer contracts regs.

 

I wonder if it is worth contacting the OFT to see what their opinion on this, as there are a number of gyms who seem to be enforcing this much notice to cancel.

[rosiecotton]

As a followup question - Next Gen's T&C allow them to cancel the membership with 30 days notice. Is it "unfair, therefore to have what amounts to THREE TIMES this notice required from a member?

 

Yes, this is likely to be an unfair term. It is putting you in a worse position than they are in, so I would be surprised if they could enforce it in a court.

[jampot]

Here's an interesting one. I've just been chatting with someone at work who is also in a sticky situation with NG.

 

They sent off written notification that they were cancelling their membership.

 

Although they didn't agree with the 3 month clause, they felt bound by it, so issued 3 months notice.

 

Not having a response back from Next Gen, they wrote again (before the 3 months were up), reminding Next Gen that the following payment would be their last as per their previous letter.

 

Next Gen were straight back to them, advising that because of the non-receipt of the first letter, unfortunately the 2nd letter would be treated as their termination, and the 3 months effectively started from then.

 

Obviously rather unhappy with this... I suggested they write back, saying that they've acted "in good faith" in posting the original letter, and deem the notice to be served correctly. I showed them the clause in the NGC agreement:

 

"Neither the Member or NGC shall be deemed to be in breach of these Terms and

Conditions by reason of any delay in performing, or any failure to perform, any of

the Member's or NGC's obligations in respect of these Terms and Conditions, if the

delay or failure was due to any cause beyond the Member's or NGC’s control

including,but not limited to, acts of God, explosions, actual or suspected terrorist

attacks, floods, fire or accident, war or threat of war, sabotage, civil disturbance,

prohibitions or measures of any kind on the part of any governmental,

parliamentary or local authority, import or export regulations or embargoes or

industrial actions or trade disputes."

 

And suggested that, whilst not specifically listed, a postal problem or an issue with NGC's internal admin, is expressly included as "beyond the member's control" and that the club's own T&C effectively protected them. A delay in Next Gen receiving the termination was outside of their control, therefore they can't be responsible for it.

Does this sound reasonable, and what do you think the outcome will be?

[jampot]

Bump...

 

I've been in (email) discussions with both the membership administrator and another (seemingly higher) member of staff.

 

They still insist that they will be owed another 2 months membership (£158 ) as they still insist that written notification to terminate the agreement is ONLY valid if they respond.

 

Thank you for your feedback outlining your position.

I would like to point out the Terms and Conditions of Membership point 5.3 and Key Points No 2, notice is not served until a written date of cancellation is received from the club.

With over 7000 members it is important that an audit trail exists to clarify such issues as termination to avoid the issues you have highlighted below.

I hope this clarifies why the 3 month notice period is required.

 

Nothing is outstanding at this point, as the membership is fully paid until the end of May - but as the DD is now cancelled, they will not be able to take June and July's payments (which they claim will be due).

 

The crux of the matter is this:

 

1) Is it fair for them to insist that written notice is ONLY valid once they respond? They are allowed, under the same contract, to issue notice which does NOT require a response in order to be correctly served - my gut feeling is their term is unfair.

 

2) If they believe a letter was sent in Feb (they haven't confirmed or denied this yet) they should act as if it had been received, as the Force Majeure clause protects both parties against "delays outside their control" (see post above for wording).

 

3) If they don't believe a letter was sent, they should damn well prove it!!!

 

Finally, it is interesting to understand the positions of both parties.

 

1) If they take to court and are successful, courts are unlikely to award costs, so they will recover £158 plus £30 (filing fee) but will have to pay their own (possibly substantial) costs for bringing the action. Certainly likely to be more than £158. Furthermore, if judgement was award, the "debt" could be paid immediately, thus avoiding a CCJ or any reference on credit files etc.

 

2) If they take to court and lose, they recover nothing, have to pay reasonable legal expenses, their own legal bill, the filing cost AND fail to recover the £158.

 

Neither action is likely to be financially rewarding, so ANY attempt to bring this before a judge is almost certainly an act of "punishment".

 

Also, it is possible that their T&C would be tested in court and deemed "unfair". And whilst this wouldn't set a direct precedent (it would be in Small Claims) it would certainly open everyone's eyes and they risk action from God knows how many of their 7000 other members and countless ex-members...

 

It is a bit of "pokerface" or "brinkmanship", but if I've understood the situation correctly, they have everything to lose and nothing to gain by pursuing this further... agreed?