Question:
I've been trying to deal with this situation now for over a year and thought
it was sorted out until another collection letter showed up last week.
Thanks for any help and here's the scoop:
In Feb of 1999 I joined World Gym and signed a contract for a two year
commitment, however the contract had an out clause saying if I moved more
than x miles from the area of a club that was owned by them (where them is
not World, it's the owners of that World franchise I signed the agreement
with) that I had no further obligation. In March 2000, I moved (no club
they owned within 100 miles) and asked them to cancel my membership. They
informed me I would need to pay a $100 cancellation fee, and pointed me to
the contract. According to the contract, this fee was only due if I didn't
move, die, had medical reasons for cancelling, etc and I tried to point that
out to them but they refused to agree. FWIW, I showed this contract to an
attorney from the legal dept at work he agreed that it appears I owed them
nothing.
World turned this over to a collection agency in November 2000 who sent me a
notice saying I owe World $220 (I have no idea how they came up with this
figure when it was $100 before). I worked with the agency on several
occasions trying to use them as a middleman to reach an agreement. I sent
them a copy of the contract and a history of my attempt with World to settle
this. In April 2001, the person I was working with at the agency told me
from his personal interpretation of the contract that I am right and that I
shouldn't owe them anything. He then said he would ask World for further
justification as to why I should pay other than "he owes us".
All was quiet until last week (November 2001), when I received another
collection notice. I called the same person I worked with back in April,
and he apologized but said that the customer will not back down, and he was
instructed that he has no other recourse but to continue trying to collect.
We both discussed how we wished we could have reached a reasonable agreement
and that the gym was not being reasonable, but that he has to do his job and
I should do whatever I felt was necessary.
Now, what's the next step to take the battle to them? I have worked very
hard to avoid any sort of court or legal action, the collection agency
acknowledged this and thanked me for being patient and reasonable, but I
think I'm out of options. If that's the next course of action, is there a
good resource out there that will help guide me down this path? I'm just
looking to close this debt and make sure my credit isn't marred by this.
While I'd love to "teach them a lesson" by hitting them in the pocketbook
for all the time I've sunk into this, and the possible damage to my credit
rating (I haven't checked my credit report since this went down), I realize
that's probably unrealistic.
Answer:
You have learned that dealing with collection agencies regarding a debt you
don't owe is futile. So don't do it any more, except for one letter. Write
to the collection agency, tell them that you don't owe anything because you
properly cancelled the contract as you had the right to do under the
contract. Keep it short and polite. Send it certified mail, return
receipt. Keep a copy of the letter. and the receipt. Then don't talk to
the agency again. No phone conversations, no letter, no response to their
calls, faxes or letters. Ignore them forever. Collection agencies often go
away when there is any hint of a defense. They are in business to collect
on the easy ones.
If they sue in small claims, go to trial and prove the facts you related to
us, and win.
As for the credit rating, check it every six months or so. If it has a
negative report, there are a few things you can go about it. But that's not
today's problem. Let us know if it happens.
Every minute you spend talking to a collection agency is a minute subtracted
from the rest of your life.
