You cancelled in March. You went in person, filled out the form, and the staff member said “all done.” It is now August, and $89 is still coming out every fortnight. Head office says they have “no record” of the cancellation. Now a debt collector is emailing about $1,100 in “arrears” for a gym you have not entered in five months.
This is one of the most complained-about industries in Australia. Here is how to end it.
Your rights depend on the contract, but the law sits above it
Gyms use lock-in contracts, but those contracts are subject to:
- The unfair contract terms law in the Australian Consumer Law (sections 23 to 28). A term that makes cancellation nearly impossible, requires an in-person form that staff “lose”, or lets the gym keep charging indefinitely is likely unfair and void.
- State fitness industry codes. New South Wales has the Fitness Industry Code of Practice; Victoria and Queensland have similar rules. These require cooling-off periods and clear cancellation terms.
- The Debt Collection Guideline (ACCC and ASIC). Collectors cannot harass you, contact you excessively, or demand money that is genuinely disputed without addressing the dispute.
Step one: stop the money
Contact your bank and cancel the direct debit authority. If the gym debits your bank account, under the Banking Code of Practice your bank must promptly process your request to cancel the direct debit. If the gym charges your card, cancel with the gym (or its billing company) in writing; your bank can still help you dispute an unauthorised charge. Do this today. If the gym uses a third-party billing company (Debitsuccess, Ezidebit, etc.), write to them too.
Ready to put it in writing?
Answer 3 quick questions to check you have the details your document needs, and see your next step.
1. Who is this about?
2. How much is at stake?
3. Do you have it in writing?
Your result is ready. Where should we send it?
Step two: the Cease and Desist
A Cease and Desist letter does four things:
- States that you cancelled on a specific date, and how
- Puts the gym on notice that any further charges are unauthorised and will be reversed as disputed transactions
- Demands a refund of every payment taken after the cancellation date (for example, 10 fortnights at $89 = $890)
- Requires them to stop all collection activity and instruct any collector to close the file, or you will complain to fair trading and file at the tribunal
Send it to the gym’s head office and to the debt collector. Once a debt is formally disputed in writing, a collector who keeps chasing you is breaching the guideline and risks ACCC action.
Step three: keep your record
- Any copy of the cancellation form or email
- Names and dates of who you spoke to
- Bank statements showing every debit after cancellation
- Entry logs if you can get them, showing you never attended
If you have nothing in writing from the original cancellation, do not panic. The gym still has to prove there is a valid contract for the period they are charging. Most cannot.
What not to do
Do not pay the collector “to make it go away.” Paying a disputed debt looks like admitting it. Do not ignore it either; unpaid gym “debts” occasionally end up as credit defaults. Deal with it in writing, this week.
Claim Done drafts your Cease and Desist for $49. Done in about 5 minutes. You approve it before it is sent.
What happens when you put it in writing — properly
Same problem. What a prepared case looks like.