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Comment by jrockway | Hacker News Reader

Doesn't everyone know this? You can't enter into a contract with someone and then just pull the payment instrument out from under them. Even if they stopped charging your credit card, they could still sue you for the amount you owe them.

You have to cancel your gym membership if you don't want it anymore. Send them a registered letter and CC the state's Attorney General office if they won't cancel the account for you.

Edit: Wow, I just realized this is Arrington's blog. Isn't he a lawyer? How can he not know this stuff?

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"Sending a registered letter" sounds like a "getting ready to sue" legal last resort. You don't have to do things like that to cancel subscriptions with most any other business.

Unfortunately that's actually the only way to cancel membership in writing at most major gym chains in the US. They all outsource membership billing to the same company, ABC Financial. ABC has their customers (the gyms) require member cancellations be sent by certified mail. Any cancellation request by phone or mail that isn't sent certified is simply thrown out. If you cancel your credit card, they'll just send you immediately to their collections agency.

This is how they guarantee "more revenue from more members than with anyone else". It's such a scummy business.

http://www.abcfinancial.com/

A Google search for "ABC Financial scam" (in quotes, exact phrase) has over 13,000 results.

I've had five gym memberships in my life. Every one of them allowed me to cancel the membership by coming into the gym and canceling it. In every case, that method, "Come into the gym and cancel" was written write on the contract.

If you are willing to negotiate with the owner/manager, they might even allow you to pay the full year up front - because that's basically the same thing (this was my argument) as signing up for a 1 year membership, and then canceling it the very same day - you are still responsible for the full 12 months, but it would end after one year because you had "cancelled" it.

Can you name a gym that won't let you cancel your membership by coming into the gym and doing so?

Ballys Fitness, Blast Fitness, Anytime Fitness and Gold's Gym according to just a few of the 90 reports on RipoffReport. I didn't just pull names out of titles, I read the reports and these are people that said they went to their gym to cancel, but kept getting billed by ABC.

http://www.ripoffreport.com/directory/ABC-financial.aspx

I didn't read all of them, but the first, "Golds" caught my attention:

== SNIP ==

"I am currently on the phone (and have been for an hour) with ABC Financial, the company that handles billing for Large Gym chains Golds Gym, Lifequest Fitness (I'm sure there are others).

I've been trying to cancel my membership. I've been put on hold 4 times." == SNIP ==

I've never had a gym membership that, by default, could be canceled via letter/fax/phone call. They all say the same thing, "Come in to the gym in person, and cancel the membership."

Most of them also have a clause saying that you are renewed for a year if you don't cancel on your anniversary.

I always add a half dozen riders (and have the manager sign it) that says things like "If I get a job or move more than 25 miles away from the gym, I can send in a letter stating that, and cancel via registered mail." - Gym managers are usually reasonable, and will let you do that. Take 15 to 20 minutes to negotiate your Gym contract - you do realize it's a contract, right?

In 90% of these cases, people just aren't demonstrating personal responsibility for the contracts they've entered.

I'll say it again - never, ever, ever enter a recurring contract (or something that might _be_ a recurring contract) with your credit card, unless you have 100% control over the cancelation and terms.

My experience with Gold's Gym is you call the number (for ABC Financial) and they tell you to mail a letter to them. They were very friendly, no hold time, but couldn't (wouldn't?) cancel over the phone. I got the phone number from trying to cancel in person at the gym. The people working the desk didn't appear to be getting paid enough to care too much (on the bright side, they didn't try to sell my anything I didn't want when I signed up. They told me $30 a month, take it or leave it).

Overall, I had to mail a letter and pay for an extra month's membership (and a stamp), but it wasn't that bad. Supposedly my contract required 60 days notice, I didn't care enough to check. People get burned up about these things, I figure there's more important things in life than $30 for a gym membership I didn't use.

>If you are willing to negotiate with the owner/manager, they might even allow you to pay the full year up front - because that's basically the same thing (this was my argument)

One difference is that with a credit card on file the company can bill you for damages, or allow you to purchase accessories after hours by signing a form.

At the gym where I'm a member, there were two separate forms to fill out: one for membership payment, one for incidental payment. Membership could be up front, automatic credit card payment, and so on. Incidental payment was optional, and could only be a credit card.

For gyms, you can go to Costco and buy a 2-year 24 Hour Fitness all-Sports club membership for $320, prepaid, too.

This is very good value

(well, it's probably because most people will go 1 month and then quit)

I've yet to see a gym actually go to collecrions. They'll send angry letters threatening things for a few months, and then give up. Don't ask how I know this :)

Might want to check your local rules on stale debt before you pop the champagne. They typically have a couple of years.

Once they figure out that you aren't going to pay with out a fight, they'd be nuts not to sell your debt -- something is better than nothing.

Well, they will sell your debt for, I dunno, 20%? Maybe more, maybe less

The buyer will make more angry letters, maybe signed by an attorney, try to negotiate, etc and then maybe go to court

You skipped "ruin your credit"

Maybe you haven't, but it happens all the time. Years ago when I was cleaning-up some credit mess I made when I was still in school I spent a lot of time learning on Creditboards.com and that was a very common collection people would seek help with.

Creditboards is a fantastic resource and I cleaned up several small (and one large) collection item from my reports far earlier than the 7.5 years the FCRA lets negative info stay on a report.

Yes, this is shady. That's why you involve the Attorney General.

I disagree strongly with this. Merchants can (and often do) change the terms of monthly payments, ignore legitimate requests for account cancellations, or even incur monthly charges for things that the cardholder was led to believe was a one-time charge.

Cancelling the card has been the cardholder's tactical weapon against that nonsense. It's still a hassle for the cardholder, so I'm left wondering how much of an actual problem it is that people are canceling entire credit card accounts just to wiggle out of a contract.

And, in the case that people do that, the merchants have recourse through either collections or court. If enough such charges go to collections, the cardholder loses the ability to open new accounts.

If people are no longer able to cancel their credit cards as an item of last resort, then the merchants are left with all the leverage. Arrington's natural response to that -- as I suspect will be most other peoples' -- will be to stop using their credit card.

I don't think we want that to happen.

Merchants can (and often do) change the terms of monthly payments, ignore legitimate requests for account cancellations, or even incur monthly charges for things that the cardholder was led to believe was a one-time charge.

That's what the dispute process is for. Sign an affidavit saying the merchant violated their contract with you, and the charge goes away.

I have absolutely no reason to trust credit companies as the unbiased vanguard of consumer protection. Signing an affidavit merely begins a process where the charge might go away, and I would expect that the process will get slower while ending up in the customer's favor less often.

You've obviously never accepted credit cards as a merchant. The process is heavily in the customer's favor.

It is incredibly hard to win as a merchant in any kind of dispute. The burden of proof is on the merchant not the customer.

The merchant pays a fee regardless of the outcome, and if you end up with more than 1% chargebacks your account is cancelled. The net effect is that any merchant who is doing this on a regular basis won't be accepting credit cards for long.

Additionally, the system is so far in the customer's favor that it's causing a fairly large fraud problem for merchants. It's bad enough that my small business won't accept credit cards for very large purchases unless the customer has a history with us.

Agree. Been a merchant in a few businesses dating back pre-net.

You need documented signed proof, in general and without that the charge is not only backed out but you get hit with a $25 or so charge back fee. And yes to many chargebacks say goodbye to the account.

We spot fraudulent charges and proactively issue a void before the consumer finds out, lest we get hit with the charge back fee as well.

> You've obviously never accepted credit cards as a merchant. The process is heavily in the customer's favor.

A company I used to work for had, some years back, made its way onto MATCH (merchant blacklist) for one of the four major credit card companies. Why? It accepted a legitimate (!) payment from a customer who was at the time under 'investigation' by the credit card company for fraud. (Obviously, this was not known to my company at the time that they accepted the payment).

Apparently, we even showed the credit card company that we had provided the appropriate services in exchange for the payment, so there could be no allegation of us helping them 'embezzle' the money. No luck - we were placed on the blacklist for seven years (give or take).

The punchline: that same credit card company had no problems issuing us a credit card in the company's name - not just once, but three times since we were placed on the blacklist.

That's only an issue if you care if your account is canceled. Plenty of 'merchants' are simply there to funnel stolen credit card information and turn it into cash.

Except that consumers almost always win such disputes and they are really not very burdensome. So bitching about this process is really just bitching.

First of all, the charge does not simply go away because you sign an affidavit... there is a little bit more process than that -- you may need to invest a couple of hours into it. At the end of that the charge will, in almost all cases, be reversed.

But that only makes ONE charge go away. The merchant can then submit another. And another. Every. Single. Month. Think of it as a DOS attack. Closing the card SHOULD (but apparently doesn't?) prevent that.

Based on my admittedly limited sample size of 1, that never actually works.

You can't enter into a contract with someone and then just pull the payment instrument out from under them.

Isn't that a different argument though? I had my wallet stolen at the end of February and would be outraged if charges from any of those cards suddenly went through my bank account.

I agree that one shouldn't just walk away from one's commitments, but isn't that what the small claims courts are, in theory at least, meant to enforce?

I absolutely should be able to deny them access to my credit card, unless the courts specify otherwise.

WTH is the bank doiing, enforcing the terms of a contract I have with a third party? since when is that the job of the bank?

Yes, the third party can sue me. Thats fine, but I must be able to maintain control over my own bank account.

I'm willing to be that somewhere in your cardholder agreement you give the bank the right to pay recurring charges on your behalf--as if you gave them the ability to act as your agent. An ability that apparently according to recent legislation you can't rescind merely by cancelling your card.

I think you misunderstood him. It's just as likely that the gym is trying to screw the customer by ignoring a valid request to cancel (even one sent via certified mail) than a customer trying to welch on a contract.

I'm sure the gym is trying to screw him. They make money when you don't show up, not when you do. That's why you read the contract before signing it, and negotiate it to something less shady. Or take your business elsewhere.

Like I said in another reply, you mail the Attorney General's office so that if there's a pattern of screwing customers, the state can take appropriate action.

I don't follow your point. If I'm getting screwed shouldn't I be able to prevent them from automatically billing me (in addition to mailing my attorney general, which seems does not seem likely to resolve the situation in the short-term)? Why can't I cancel a recurring billing relationship just like I can cancel a check?

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