Could we contest this term in court?

[ButterflySally]

Hello. I have posted this before in AIBU (so apologies if some of you have read it) but thought I'd post here too, seeing as though it is the more specialised legal area!

My partner and I joined a gym and cancelled our membership in Dec 2009. We have written confirmation of the cancellation.

Our gym membership was paid by standing order. Unfortunately my partner omitted to cancel the standing order, so for the last year, he has been sending payments to the gym for our cancelled membership. Complete and total error on his part...and yes, like all of you reading this, I too can't believe he didn't notice the payments coming out!

The gym refuse to refund saying that all their documentation states that it is the consumer's responsibility to cancel the standing orders and that no refunds will be given.

We accept our role in this situation but are still not convinced that our error 'entitles' the gym to keep this money. We would be happy to pay a reasonable 'administration fee' as it was our error to cover their costs but don't feel it is right they keep all of the money.

Given it has added up to a significant amount of money, if our negotiations with the gym are unsuccessful, we are considering taking it to the small claims court. Is there any one who knows enough about the law to say whether or not we could possibly have a case under the 'unfair terms' act (or whatever it's called)?

Any advice / help would be greatly appreciated. Thank-you.

yup go to court you will get your money back
it is up to you to cancel your standing order but that doesn't mean they keep your money for ever!! They have to give it back - it isn't their money, you sent it in error.

Write them a letter telling them that (or get a solicitor to) and telling them that if they don't send you a cheque in say 14 days, you will start proceedings in the small claims court (if it is under £5k which I assume it is)

You can make a claim on moneyclaim online if they don't pay up.

Thanks freshmint. Good to hear you think we would be successful in court!

I have only spoken with them over the phone at this stage. Should I send a nice, polite letter first requesting a refund and then, if they don't comply (which I suspect they won't), send them a 'we will start proceedings in court if we don't receive a cheque with X days' type of letter...

OR... should we just go straight to sending them the one letter stating that if they don't issue a refund, we will start court proceedings?

What would be the best approach?

Think you should send a letter first setting out the facts, telling them it is your money not theirs, and asking for the money back by a certain date (couple of weeks) otherwise you will be discussing your options with your solicitors. Refer to the conversations you have had.

Then if they don't pay, send a letter before action. Short and sweet. I refer to my letter of [ ] asking for return of [amount] mistakenly sent to you after the cancellation of our membership by [date in the first letter]/

We have not heard from you or /I have received your letter of [date] refusing to do so. I am writing to warn you that if we do not receive the full amount of [] by [two weeks] we will issue proceedings against you in the courts. If we are successful, which we fully expect to be, you may be liable for this amount plus costs.

lots of love, butterfly

in the small claims court not courts.

Good advice from freshmint there

Great, thanks heaps for all your advice! Will send them the first letter tomorrow.

Absolutely go to the small claims court. If you have a cancellation letter from the gym they simple shouldnt have continued to take out the direct debit. It the cancellation of the contract which is the most important thing rather than the direct debit cancellation. Inform the gym what you will do and they may just pay up as the losing side pays any fees.

Thanks, sneezecakesmum. The payments were made by standing order, not direct debit. Unfortunately this means WE had instructed our bank to send the money to THEM (rather than them taking the money from us). Do you think this would make a difference in court??

We do have a copy of the cancellation letter - I requested it before I made a fuss about the refund as I thought I'd need it to prove our contract with them ended.

I dont see why it should but I am not a solicitor. I think it will come down to the terms and conditions of the contract. Read these carefully and look at what it says about ending the contract. If it says one months notice, and you gave them this then they must refund all but one months subscriptions. The fact that you have a dated cancellation letter from them proves they acknowledge you have ended the contract in a legal manner. For them to have continued to accept your money and now to refuse to refund it is unreasonable behaviour and a breech of contract if the above conditions are correct. I bet if you tell them what you are doing they will refund. I did a GCSE in Law for fun, and contract law is all about the terms etc. Yours seems quite simple really.

Speaking as one who let my gym membership run on for months and months without cancelling or going to the gym!!

Money paid over by mistake is always recoverable I think. Otherwise the people who get paid out double by cash machines would legally be entitled to keep it, and they aren't.

Also if your employer overpays you by £700 you have to pay it back!!! Been there too.

doesn't matter how it was paid (SO, DD, whatever)
it was paid by mistake, so is yours not theirs
end of story

make sure (if it gets as far as a claim) you claim interest as well (and mention that you will be seeking it if you have to issue proceedings in your letter before action)

if they see it is going to increase the amount they have to refund you, plus costs on top, they are even more likely to settle.

The important point here is that any money you paid them after you terminated the contract (having settled any outstanding amounts due under the contract, notice period etc.) is nothing to do with the contract - it is just your money that you gave to them by mistake.

They must pay the money back to you if you ask for it, otherwise it is not breach of contract (there is no contract any more), it is theft!

All those who said they are not entitled to keep your money are correct. money paid by mistake is definitely recoverable.