Educational Consumer Tips

Three Day Cooling-Off Rule (cancel contracts)

Author: Better Business Bureau

The following is BBB general information and is not intended as a report on any specific company.

The Federal Trade Commission's Cooling-Off Rule states that a purchase over $25, your right to cancel a contract for a full refund extends until midnight on the third business day after the sale (Saturday is considered a business day; Sundays and federal holidays are not). The Cooling-Off Rule only applies to sales at the buyer's home, workplace or dormitory, or at a temporary workplace of the seller (such as hotel or motel rooms, conventions centers, fairgrounds or restaurants).

Under the Cooling-Off Rule, the salesperson must tell you about your cancellation rights at the time of the sale. The salesperson must also provide copies of the cancellation form (one to keep and one to send) and a copy of your contract or receipt. The contract or receipt should clearly show the date, name and address of seller, and explain your right to cancel.

Also, the contract or receipt must be in the same language used during the sales presentation. In New York State the three-day cooling-off period does not begin until the seller gives you the "Notice Of Cancellation" form. Until a form is received, you may cancel the door-to-door sale by notifying the seller at any time, in any manner. You do not have to give a reason for canceling; it is your right to change your mind. Nevertheless, it is suggested you send the cancellation notice in writing. You should send a certified letter with return receipt requested.

If you terminate a contract, within 10 business days the merchant must cancel and return any papers you signed, refund your money, tell you whether any product left with you will be picked up, and return any trade-in. Within 20 days, the merchant must pick up any items left with you, or, if you agree, pay any shipping expenses for you to ship them back. If you received any goods from the seller, you must make them available to the seller in as good condition as when you received them. If you do not make the items available to the seller, or if you agree to return the items and fail to do so, you remain obligated under the contract.

However, there are some exceptions to the Cooling-Off Rule. The rule does NOT apply to:
*sales made at the sellers' usual place of business
*sales under $25
*sales made totally by phone or mail
*sales for real estate, insurance or securities
*sales for emergency home repairs
*sales that are made as part of your request for the seller to do repairs or maintenance on your personal property (purchases made beyond the covered maintenance or repair request are covered)
*sales that begin in a retail location and finish with a contract signing in your home (such as ordering a carpet at a store and signing the contract when someone comes to your home to measure the floor)
*sales made at the sellers' usual place of business when a contract is signed to purchase a car, furniture, a computer, or a stereo system
*sales of goods or services not intended for personal, family or household purposes (courses of instruction and training are covered by the cooling-off rule)

If you paid by credit card and a billing dispute arises, you should notify the credit card company and dispute the purchase.

If you have a complaint that may concern the Cooling-Off Rule the BBB suggests you contact:

Better Business Bureau 
(800) 828-5000 
Federal Trade Commission (FTC)

New York State Attorney General's Office 
This information is general in nature, and is not to be interpreted as a Business Review on any specific company.