whats your views on annual contracts / monthly direct debit

[NeilT]

Hi

Dont worry this isnt my club that doing this - I simply pay weekly there, but there is a club in my area that insists student sign up for 12 months at a time and pay training fees monthly by direct debit.

They say its all about commitment to the club and helps people get through the tough times when they usually would have quit.

Whats your views on these setups?

thanks

[24fightingchickens]

I avoid all contracts with any business. Usually with contracts comes billing services. If a karate school wants, they can take the contract, sell it for 50% of its total value to a billing service, and then you will be invoiced by a 3rd party. Those people will then start collections procedures if you stop paying, where if you were paying the instructor directly, you would be able to cut a deal with him. I avoid these like the plague and always advise to avoid any business that wants to do direct debit. Direct debit gives the business in question the ability to withdraw all funds from your bank account any time. One mistake, and you are flat broke, all your checks bounce, and your credit score is shot. Consumer reporters also advise that you not sign contracts or do direct debit.

My favorite consumer reporter is Clark Howard. http://www.clarkhoward.com

He has advice on his site that will read about like mine with respect to both of these issues.

[ovine king]

you can't generalise and say all places that insist you sign up for a monthly direct debit is bad and evil. in a lot of cases, it really is simply to make things easier in the actual class by not having to deal with any paper work when you should be training. also, some clubs barely cover costs of insurance, overheads, equipment (especially if they are new and are still recovering from start-up costs). a direct debit system makes it easier for them to have an idea of income/expenditure. on the other hand, when a club is big and has hundreds of students spread over different classes at different locations, it again, makes life easier.

i have never had any trouble with direct debit, especially considering the fact that i am the one who can tell the bank to cancel a direct debit at any time.

[24fightingchickens]

you can't generalise and say all places that insist you sign up for a monthly direct debit is bad and evil.

I did not generalize and say that all places that insist you sign up for a monthly direct debit card ar bad and evil. You are the only one who said that.

I wrote that I do not trust a business to allow them to have direct debit access to my account because I do not want a billing mistake to result in all of my cash being withdrawn. I said that consumer reporters by in large agree that direct debit is not a good practice, that it is insecure, and that allowing a business to debit your account at will through such a system has been very problematic in the past.

I also said that I prefer not to sign up for a contract, because after I do this, the contract can be sold to a third party vendor, and that will make it difficult for me to leverage my relationship with the school owner to barter for extra training or discounts if he is no longer the holder of my contract. I said it puts me at a disadvantage.

Please do not put words in my mouth and then argue with them as if I said them.

i have never had any trouble with direct debit

Neither have I, but then I do not allow anyone that access to my account. Everyday thousands of people call their banks and complain about having their money withdrawn by a business that mis-billed them through direct debit - either maliciously or by accident - either way, the process of recovering the lost funds is tedious, and not worth the inconvenience for me.

Edited September 11, 2005 by 24fightingchickens

[Zaine]

I dont really believe in doing contracts its cause if its to much for someone they'll still take money out of your account and they have your debit number, i think someone reffered to that as a mcdojos, my school is free but, i wouldnt mind paying monthlybut not with a credit or debit card

[24fightingchickens]

A credit card is probably safer than paying with cash if you pay in advance. If there is disagreement about whether or not you got everything you paid for, you can place the charges in dispute and keep the business from continuing to charge you. It is auto-debit that scares me - that and contracts.

[sweetpea0525]

I am mixed about this one. If you had asked me a year ago, then I would have said contracts are very bad, but over the last year, due to many students taking off for a month here, or there and not really concerned about paying, or slacking on payments, or complaining about the scheduling and fees, our school has decide to compete more with the market of the area and offer credit card services, direct debit, and contracts starting the first of '06. The difference being it is not sent to a third party and it will not be sent to collections if not paid, and if you are out due to injury or illness for more than one month, you will be reimbursed or credited the amount. The nice thing though, is that the student will have the option of payment form. They can sign 1 year, 6 month, or still remain on the monthly basis. If they sign the yearly contract they can pay all at once, or it will be the $60 fee that is currently the monthly fee. If they sign the 6 month contract, they will pay $70 monthly, or in a lump sum. If they decide to remain on a monthly basis and not sign any contracts, then they will be paying $80 a month. We will also continue to have free friday nights and you can attend as many classes as you want, so there are some good things too. This is a decision that has been in debate in many of our meetings, but is now going to be put into effect.

[AngelaG]

Do you not have standing orders in the US? I pay monthly by standing order. This is a pre-agreed set amount that comes out on the same day every month. The standing order can be cancelled any time by me, and the amount is static. It makes life extremely simple.

[P.A.L]

my first shorin ryu sensei took us to a jujitsu/kong Fu school ,deal was to train in Bjj for 6 months , 300 each cash, we didn't signe any contract but 3 of us came later and signed some papers without reading it assuming it's the same deal as our, this was last year and this year they got a letter from a collector asking for 12x$120 , we trained about two months and we all left , school sent their contract to the collection agency ,we were not even in school whole last year. finally my sensei had to go their office they still asking for money he finally totld them if they don't call the contract back from collector he will go to school and will officially challenge the schools' Sifu , they finally droped the charges.

i don't care if it's Bruce lee or Matsumura himself i will not sign any long term contract with them. my current sensei has a box and we just drop the money monthly.

[24fightingchickens]

Do you not have standing orders in the US? I pay monthly by standing order. This is a pre-agreed set amount that comes out on the same day every month. The standing order can be cancelled any time by me, and the amount is static. It makes life extremely simple.

In the US, we can use an online banking tool to set up automatic payments to be mailed in check form to a business on a weekly, monthly, annual, or one-time basis. It is very sophisicated, and I use it to pay the mortgage and some other regular bills that are always the same amount. I recommend doing that over direct debit. That way I have control and no one has access to my account.