Can I Legally Terminate My DirectBuy Membership and Beta Finance? – Peggy

“Dear Steve,

After my husband died suddenly in 3/2011, I took half of his small life insurance monies to invest in our house which needed at tremendous amount of work. I joined the expensive Direct Buy Clu in Fishkill, NY with part of the membership fee financed by their finance company, Beta Finance.

I went to the Direct Buy Fishkill warehouse and was disappointed each and every time. Though I completed all the work on my home I purchased nothing from Direct Buy. They were not cheaper and none of the sales people seems interested or were able to answer my questions.

The entire experience was a dud! Shortly after, I got an e-mail that the DB Fishkill Club was closing. I have tried to cancel my membership and be freed from obligation of paying any further the monthly amount I owe, as there is no other location convenient for me.

The closest one is an hour away and this presents a problem. Corporate DB refuses to help as they say the Fishkill Club site was franchised. I will be paying for this membership to a club in my area that no longer exists.

Can I legally terminate my DB membership and be relinquished from the debt I incurred when I financed part of the initial membership fee with their Beta Finance Co.?


Dear Peggy,

First off, I’m so sorry to hear of the recent passing of your husband. It all seems to have been a traumatic event for sure.

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Sadly I’m not surprised about the position of DirectBuy corporate. It’s something I can almost predict when it comes to these franchise locations.

You have a good story to tell and I would suggest you contact your local consumer protection offices, file a complaint, and ask for help intervening. You can reach your local contacts here.

Unfortunately the key factors if you can legally terminate your agreement are going to be in the agreement you signed. If the agreement you signed was with a local franchise company that went out of business, it seems you would not be on the hook for continued membership. But since a finance company advanced funds to the company on your behalf and now you have a finance agreement with Beta Finance, that’s a different matter.

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I’m fairly certain Beta Finance would argue they have a consumer credit agreement with you and it’s not their fault the local franchise went out of business.

I’d like to look into this further but I’d need a copy of your DirectBuy agreement and Beta Finance agreement you signed when you joined. Do you still have those?

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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