Consequences for Refusing to Pay Collections Agency

by Michael
(Colorado Springs, CO, USA)

I cancelled my gym membership back in November 2011, but they never gave me a copy of the cancellation form that I filled out. Per our original contract, they charged me one more month (December). I did not see a charge in January 2012 and assumed it was taken care of. I recently noticed in July 2012 that they have been collecting my monthly dues ($39.99/mo) since February 2012. I called the company and explained the situation, but they said they have no record of my cancellation. I also went to my bank to dispute the charges: the bank put a stop to all debits from the gym, refunded the last two months membership ($80) and is in the process of refunding the other four months ($160). When I explained all of this to the gym's corporate supervisor over the phone, she said that if the bank takes that money back from them, they will send it to a collections agency. Even though they never gave me the copy of my cancellation form, I feel very strongly that they are in the wrong and I refuse to pay. What are the consequences for not paying a collections agency for such a small amount ($280)? Will they attempt to sue me? Will it affect my credit report?

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Aug 09, 2012
Consequences for Refusing to Pay Collections Agency

If the gym reports your account as past due or in default to any of the credit bureaus, that information will harm your credit. However, you can dispute the information with the credit bureaus to try to get it removed. Unfortunately, that can often be easier said than done.

There is no way for me to know whether or not the gym will sue you for the money it says you owe. It depends on company policy.

If you believe that you are in the right, I recommend that you contact a consumer law attorney in your area who helps consumers resolve their debt collection problems. If the attorney is able to take care of this problem for you, be sure to ask him or her to request that the gym tell whatever credit bureaus it reports to remove the negative information about your account from your credit reports.

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