Cancelling your gym membership
By Michelle Warren • Bankrate.com

I confess: I was one of thousands who joined a gym last year as part of a New Year's resolution, but my aspirations fizzled about mid-February. However, because I'd signed a year-long contract, I quietly continued allowing payments to be deducted from my credit card. I figured $35 a month was a small price to pay to keep my dignity intact. I had no desire to beg the people at the gym to let me off the hook simply because I was a lazy cheapo with little willpower.

But, one year-of-payments later, I felt I'd paid my dues. The problem was, the gym kept billing my credit card, even after I sent them a letter -- a full 45 days in advance -- advising them that my contract would soon be up and I would no longer require their services.

After several irate phone calls, the manager agreed to stop taking payments but refused to refund the money taken without my authorization. He insisted he never got my letter and besides, they required me to appear in person to fill out cancellation forms. When I pointed out that my contract simply stipulated I was to provide 30 days' notice and said nothing about appearing in person, he said they had the authority to amend the contract at any given time.

I was frustrated and felt like I'd been scammed, but didn't know what to do about it. After hearing countless such tales, I realized I'm not alone.

Stopping automatic debits
The wide-spread use of automated payments makes it difficult to end gym memberships and the like. Once organizations have access to your financial information, it seems they have the upper hand. Still, we opt for automatic payments, either by credit card or from bank accounts, because they're convenient. Last year, for the first time, automatic payments surpassed cheque writing as the most popular method for paying recurring bills, according to a MasterCard International study.

More than 40 million pre-authorized payments are deducted from Canadian bank accounts every month, says Maura Drew-Lytle, senior manager of media relations for the Canadian Bankers' Association. "If you've signed an agreement, that gym has every right to take out those payments for the agreed duration of time," she says.

However, if there's a problem with the amount, frequency or unauthorized deductions, take action. The Canadian Payments Association has rules governing such agreements.

Drew-Lytle recommends first going to the merchant to rectify a problem. If that doesn't work, ask your bank -- within 90 days of the money coming out -- to reverse the withdrawal. Arm yourself with documents showing the deduction was unauthorized and the bank will pursue the vendor. You can also request a stop payment, though some banks require at least three days' notice and you have to fill out some forms.

Credit card companies also have dispute systems that allow cardholders to query charges that appear on their statement, however, this involves a lot of perseverance and paperwork.

Fulfilling the contract
Keep in mind you can't arbitrarily cancel a contract or stop making payments. "A lot of gyms would be out of business if people changed their minds like that," says Ronni London, a Toronto-based lawyer. If you've signed a contract, in most cases, you're obligated to fulfill the terms of that contract unless the gym has in some way misrepresented itself or there's a fundamental difference between the services promised and what's been provided.

However, as part of Ontario's legal cooling-off period, consumers now have 10 days, after signing, to cancel a contract and get their money back should they change their minds for any reason. Most provinces have such provisions -- in Manitoba, for example, it's seven days. "People should closely read the terms of their contract," stresses London, adding legal action can be costly.

If a gym has squeezed an extra payment out of you, you're looking at $75 to issue a claim in small claims court and another $100 to set a trial date. As a result, proceed with caution before signing on the dotted line.

Exploring the options
Ask a friend if you can visit her gym on a guest pass (usually there's a limit on the number of times you can do this). When you find a place where you're comfortable, ask for a trial membership or inquire about day or monthly rates. Paying such fees will cost more in the long term, but it's a good way to test the water. Also, some gyms allow you to take over the duration of another person's membership if, for example, she is moving away or is ill. This usually involves a transfer fee.

If you stick with it, then think about a year-long contract. Always look for one that allows for putting the membership on hold should you go on an extended vacation, become ill, etc.

Saying goodbye
In Ontario, gyms and services such as karate lessons and the like are covered under the Consumer Protection Act, whose enforcers receive more than 1,000 complaints each year about health and fitness clubs. Under the act, all club memberships are limited to one year. Never sign up for a lifetime membership -- it's illegal for a club to offer them.

Also, a vendor can't simply continue taking money out of your account, assuming that by saying nothing, you want to continue the contract, which is essentially what happened to me. The vendor must provide notice that the contract will be renewed at least 30 days in advance. The notice must stipulate that the contract will not be renewed if the consumer tells the vendor not to renew it. If your membership has been renewed without notice, send the vendor an illegal collection letter. You can find instructions on how to do so at the Ontario Ministry of Government Services Web site.

The bottom line is never assume that just because your contract is ending that the money will stop coming out of your account. Be proactive. It's never as simple as making a phone call or sending an email -- a smarter idea is using registered mail. In many cases, gyms want you to come in and fill out documents. It's a hassle, and not a little bit humiliating, but following the rules will save you headaches and money.

Michelle Warren is a freelance writer in Toronto.