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Hello AllExperts Expert!

So I'm hoping you can give me some insight as to what to do about this situation. I live in Chicago and recently got married and moved my wife down here. In a fit of good intentions we both started gym memberships with a facility not to far from our current location.

Well like most gym memberships, our sat unused for several months at which point I decided to cancel both of them and save us the $40/month. As it turns out this particular company has a TERRIBLE track record when it comes to letting member cancel. I was informed that canceling would cost each of us perhaps $100 as an "early termination fee." Apparently by signing up we were in fact under contract for 12-months. Regardless I requested the account be canceled, assuming it would be canceled and the fee charged to the credit card I had provided.

Fast forward to now, I started getting text messages indicating that there "was a problem with your (company name) billing. please come in and update your billing info." Confused, I checked into things and discovered that the account was in fact never cancelled and has continued to accrue a balance for a service we have not used in 4-6 months!

Now here's the trick. Due to a policy change, the company is no longer accepting payment by credit card (my original method). In doing so, they've effectively erased their own ability to charge me anything, therefore triggering the "billing alert" texts I got.

So the question. With such a horrible reputation (some previous customers have $1000+ balances from accounts supposed to be canceled years ago) I have no interest in providing them a noose to hang me by in the form of any new payment information nor do I wish to pay the outstanding balance they've been wrongfully heaping on my account from ignoring my cancellation.

So if I just leave things as they are what kind of consequences am I likely to run into? Will having such an account effect my credit score? Am I liable to be sued or otherwise harassed? Are there any legal actions that could be taken against me? I just want to have an idea if it's REALLY in my best interest to fork over the money I don't have to make it all go away or just to let it lie and ignore it as they've been so pointedly ignoring my cancellation.

Thanks,
-Luke

Answer
So if I just leave things as they are what kind of consequences am I likely to run into? Will having such an account effect my credit score?

Depends on whether they subscribe to the credit reporting companies (Experian, Transunion, or Equifax)      Most do, and you can easily check by just looking at your credit report    you can get a free copy online at www.annualcreditreport.com  The same answer applies if the original gym company sold the account to a collection agency.   

Am I liable to be sued or otherwise harassed? Are there any legal actions that could be taken against me?

Possible lawsuit, but the amount is so small, they may do nothing.    Whether they would be successful or not depends on the terms of your original contract.


I just want to have an idea if it's REALLY in my best interest to fork over the money I don't have to make it all go away or just to let it lie and ignore it as they've been so pointedly ignoring my cancellation.

You've done what you could to cover yourself.    It is pretty much their move at this point, and they may do nothing.   One thing for sure, it won't do you all that much good credit wise to settle with them or pay them anything.     Despite what they say, they will leave it on the credit as a trade account in default, and that will knock your credit down some, whether you pay them or not, but probably not enough to justify paying a thousand dollars or so.   


If it were me, I would wait and see what happens.    Chances are this will pass fairly quickly and you can save yourself the 1000 dollars or so.  

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