Saturday, March 28, 2009

The karate scam

Originally posted March 11, 2009

My 7-year-old daughter became interested in karate through a short introductory course, which was promoted as a fundraiser for her school. She was hooked, so hooked that she quit dance and gymnastics to join.
I had the twins with me when I registered my daughter and they were screaming to get out of their stroller. So I didn’t pay much attention when one of the owners explained the six-month contract and the automatic deductions.
I just signed the papers.
Fine.
A six-month commitment was probably a good idea anyway. It would force her to stick with it long enough to know whether karate was really her thing.
And it is.
She loves it.
But now we must quit.
It’s a matter of principle.
It’s a scam.
For the past several months, the folks at the karate school have lured her deeper and deeper with tips on her belt, new belts, more tips, more belts and lots and lots of games. She has anxiety issues and she loves the fact that the instructors simply take control.
They tell her what to do and she does it.
They tell her not to cry and she doesn’t.
They tell her to be respectful and she is.
But two weeks ago, she received a letter. The letter informs me that she is nearing her testing for lime belt and that’s time to make a greater commitment. My daughter may continue only if I sign a three-year contract, agree to let some outside company continue to withdraw funds from my account, pay double the tuition I’m paying now and give 90 days notice for cancellation.
I’m not stupid.
This is about money.
This is about hoping that, if my daughter stops going, I won’t get around to cancelling for a month or two, and then I will still have to pay for another 90 days. This is about using outside companies who have can easily send those who oppose this system to collections, possibly ruining their credit.
This is not about karate.
One of my daughter’s best friends joined about the same time. Her mother, a single mom, recently lost her job. Two months remained in her six-month contract. She tried talking to the owners. They offered to let another family member fill the slot (She has no siblings), but they refused to cancel her automatic deductions.
I have left two messages, asking to talk about the 3-year contract. They have not called back.
Since then, I have learned from others that they will not call back and they will not budge if I approach then face-to-face (which I will do this week). Fortunately, my daughter is very bright. I explained the situation and she understood.
She’s going back to gymnastics, where I pay tuition every eight weeks by check.

13 comments:

julian-tempest said...

Wow, that's pretty crappy. Yeah, I definitely agree that you need to leave those guys in the dust, but I wonder; if she likes Karate so much, why not simply find another, more honest dojo?

twinsmom said...

We started looking at a few other places, but now she has decided she'd like to give tumbling a try. I hope she does go back to karate again someday though. She really seemed to enjoy it.

Ciao Stacy said...

I totally feel for you! They talked us into signing a contract for the "guaranteed black belt" and you save 25.00 per month! So, yeah we did that. And I specifically asked what would happen if my 5 year old starts school, loses interest and wants to try out other sports and we need to stop attending. The lady told us that we would have to pay the 25.00 difference for the months he was enrolled. That was a total lie! I received the buy-out bill today and it was 300 dollars more than the 25 x 16. Give me a break! They want over 700 dollars and have a due date of a month. I am so NOT a fan of National Karate and I hope everyone in the world reads this before they sign on the dotted line. BUYER BEWARE! I hope that television catches wind of this because I do not want others to have to go through what we have. I talked to someone today who told me they paid the entire amount up front and basically their kid gets the black belt and because my son isn't attending, he won't get it, and we are both paying the same price. Deceitful SCAM BEWARE!

Anonymous said...

"I had the twins with me when I registered my daughter and they were screaming to get out of their stroller. So I didn’t pay much attention when one of the owners explained the six-month contract and the automatic deductions.
I just signed the papers.
Fine."

Yep usually helps to pay attention when they explain the contract rules to you. Also helps if you read them. You would have probably avoided all of this if you did.

"One of my daughter’s best friends joined about the same time. Her mother, a single mom, recently lost her job. Two months remained in her six-month contract. She tried talking to the owners. They offered to let another family member fill the slot (She has no siblings), but they refused to cancel her automatic deductions."

Of course because they signed a contract. It is not rocket science. Weigh up the risks before signing one. Seriously people these days do not like to accept responsibility, and cry and whinge when they cannot get out of a commitment because circumstances in their life have changed.
They offered an alternative, but it still isnt good enough. There are two sides to the coin. Just because they want you to honour the contract doesnt make them bad.

So pretty much you just need to accept responsibility and suck it up!!! If you do not like it, do not SIGN!

Twinsmom said...

Thank you for your observations, anonymous.
I did accept responsibility and I believe I wrote that the six-month commitment was a good thing.
I brought up the woman who lost her job as evidence that this would be the kind of treatment I could expect should I sign that three-year contract. They wanted to lock me in, knowing that things change quickly for 7-year-old children. To expect a three-year commitment from a 7-year-old is ridiculous and indicative of a scam.
I, personally, would never have let a third party deduct the money from my account as that woman did. Nowhere in the paperwork did the karate studio accept responsibility for the third party acting on its behalf. I found that suspicious and preferred to pay by check each month. Fortunately, they let you do that for the six-month initial membership. That's smart on their part -- lure the child in, get the child excited and then prey on the parent who doesn't want to disappoint his or her child when it comes time to sign the three-year, auto-withdraw agreement.
The point of the post is to help parents become aware of such scams. There are many, many legitimate studios out there, but how do you know which ones really have the interests of your child at heart? I learned the hard way -- look beyond six months. Find out what the renewal terms are before your child becomes immersed. And, in a case like this, do as we did: take your child and get out.

Anonymous said...

Same thing happened to my wife. She went to a "fund raiser" at the karate class, and was talked into a 12 month contract with only 3 days to cancel, and direct payments to be taken out of our bank account. When we went to cancel, the creep tried to rip up the contract, but we retained it and gave a copy to our lawyer. Karate classes all over America are involved in this scam and they're billing company is "educational funding company". Look it up and you will see how many people were scammed.

Anonymous said...

National Karate said by law they can only sign a two year contract. they fill the two years in at the top and then add in two years in the middle of the contract with writing under it that says you have to send certified mail or registered mail in order to stop the contract from renewing the last two years (total of 4 years) then they don't sign or except the certified mail or the registered mail. We tried both ways. We're getting a lawyer. You should join us! And I had the credit card cancelled as it lost or stolen and somehow they got the charges put a new credit card by the same company. so I think I'm going after that credit card company as well. Its the principal. They teach our kids principals and they have none!!

Twinsmom said...

Thanks Anonymous and Anonymous for sharing your stories. Karate is an awesome pursuit and it's a shame that some studios tainted the art with these kinds of scams. The more people share their stories though, the easier it will be to weed them out.

Anonymous said...

update from 1/20/13. Keep your registered mail receipt or certified mail receipt. Even though the envelope gets returned because the karate studio won't sign for it. Its still sufficient enough proof that you did what the contract required to NOT renew it. The credit card excepted it. I told them that they try to do this to everyone and ruin some folks credit. My advice, don't sign up for automatic payments w/your credit card and don't let them put 4 years on your contract.

Twinsmom said...

Great tip! Thanks for sharing. I'm so glad to hear to you got out of the contract and got your money back.

Unknown said...

It always seemed like a scam around here. I've been told by a couple parents that I should get my three boys involved in Karate. So I asked how much it was and they said $100 per child per month. I said well, that's that for that. I'm not paying $300 a month for Karate. Seriously, there are expensive sports but Wow. It just seems like a money making operation. Little tiny kids, $100 per month.

Clearanceman2 said...

It always seemed like a scam around here. I've been told by a couple parents that I should get my three boys involved in Karate. So I asked how much it was and they said $100 per child per month. I said well, that's that for that. I'm not paying $300 a month for Karate. Seriously, there are expensive sports but Wow. It just seems like a money making operation. Little tiny kids, $100 per month.

Anonymous said...

Thank you so much for this information. I am going through this exact situation right now and while I'm worried and frustrated about the circumstances now I know this is common. I was pulled off the floor before the end of my last free class, clearly not entirely focused yet, told it was a year contract with 90 day cancellation notice. While I thought both were ridiculous expectations I was up for the challenge since I truly liked the training....and I'm usually on top of things enough to know when to put the notice in if needed. I fulfilled the year contract and emailed twice to put in my cancellation notice only to receive a phone call asking me to respond. During the call I was told that I would STILL need to submit a 90 day notice and that it would start then. Four months later they were still charging me and sent a copy of the contract that said I signed up for 3 years!!! And, now I'm being told that I was supposed to have sent a letter certified to cancel which was never mentioned before. While standing there ready to sign that contract I knew I should said I would take it home to review and that's my fault, but it was a fairly simple form and I wrongly trusted that someone telling me one year would actually only mark dates for one year. The owner continues to try calling but because he avoids a paper trail by keeping his communications verbal I won't call him back but called a lawyer. Luckily I still have both sent cancellation emails and record of his phone number showing a 6 minute conversation following the second email. There have been online accounts that he claims not to have received certified mail.