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A
COMMON MISCONCEPTION: “I
HAVE THREE DAYS TO CANCEL MY PURCHASE” COOLING
-OFF RULE A
FEDERAL LAW If you buy something at a store and later change your mind, you have no legal right to return the merchandise and obtain a refund. But if you buy an item in your home or at a location that is not the seller's permanent place of business, you may have that option. The Federal Trade Commission's (FTC's) Cooling-Off Rule gives you three days to cancel purchases of $25 or more. Under the Cooling-Off Rule, your right to cancel for a full refund extends until midnight of the third business day after the sale. The Cooling-Off Rule applies to sales at the buyer's home, workplace or dormitory, or at facilities rented by the seller on a temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds and restaurants. The Cooling- Off Rule applies even when you invite the salesperson to make a presentation in your home. Under the Cooling-Off Rule, the salesperson
must tell you about your cancellation rights at the time of sale. The
salesperson also must give you two copies of a cancellation form (one to keep
and one to send) and a copy of your contract or receipt. The contract or receipt
should be dated, show the name and address of the seller, and explain your right
to cancel. The contract or receipt must be in the same language that's used in
the sales presentation. SOME EXCEPTIONS Some
types of sales cannot be canceled even if they do occur in locations normally
covered by the Rule. The Cooling-Off Rule does not cover sales that: are under
$25; are for goods or services not primarily intended for personal, family or
household purposes. (The Rule applies to courses of instruction or training.);
are made entirely by mail or telephone; are the result of prior negotiations at
the seller's permanent business location where the goods are sold regularly; are
needed to meet an emergency, i.e. insects suddenly appear in your home, and you
waive your right to cancel; are made as part of your request for the seller to
do repairs or maintenance on your personal property (purchases made beyond the
maintenance or repair request are covered). ALSO EXEMPT
FROM THE COOLING-OFF RULE ARE SALES THAT INVOLVE: real
estate, insurance, or securities; automobiles, vans, trucks, or other motor
vehicles sold at temporary locations, provided the seller has at least one
permanent place of business; arts or crafts sold at fairs or locations such as
shopping malls, civic centers, and schools. HOW TO CANCEL To
cancel a sale, sign and date one copy of the cancellation form. Mail it to the
address given for cancellation, making sure the envelope is post-marked before
midnight of the third business day after the contract date. (Saturday is
considered a business day; Sundays and federal holidays are not.) Because proof
of the mailing date and proof of receipt are important, consider sending the
cancellation form by certified mail so you can get a return receipt. Or,
consider hand delivering the cancellation notice before midnight of the third
business day. Keep the other copy of the cancellation form for your records. If the seller did not give cancellation forms,
you can write your own cancellation letter. It must be post-marked within three
business days of the sale. You do not have to give a reason for
canceling your purchase. You have a right to change your mind with or without a
reason. IF YOU CANCEL
YOUR PURCHASE, THE SELLER HAS 10 DAYS TO: CANCEL AND RETURN ANY PROMISSORY NOTE
OR OTHER NEGOTIABLE INSTRUMENT YOU SIGNED; refund all your money and tell you whether any
product you still have will be picked up; and return any trade-in. Within 20 days, the seller must either
pick up the items left with you, or reimburse you for mailing expenses, if you
agree to send back the items. 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 but
fail to - you remain obligated under the contract. PROBLEMS If you have a complaint about sales practices
that involve the Cooling- Off Rule, write: Consumer Response Center, Federal
Trade Commission, Washington, D.C. 20580. The Rule's complete name and citation
are: Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain
Other Locations; 16 CFR Part 429. You also may wish to contact a consumer
protection office in your city, county, or state. Some state laws give you even
more rights than the FTC's Cooling- Off Rule, and some local consumer offices
can help you resolve your complaint. In addition, if you paid for your
purchase with a credit card and a billing dispute arises about the purchase (for
example, if the merchandise shipped was not what you ordered), you can notify
the credit card company that you want to dispute the purchase. Under the FAIR
CREDIT BILLING ACT, the credit card company must acknowledge your dispute in
writing and conduct a reasonable investigation of your problem. You
may withhold payment of the amount in dispute, until the dispute is resolved.
(You are still required to pay any part of your bill that is not in dispute.) To
protect your rights under the Fair Credit Billing Act, you must send a written
notice about the problem to the credit card company at the address for billing
disputes specified on your billing statement within 60 days after the first bill
containing the disputed amount is mailed to you. If the 60-day period has expired or if
your dispute concerns the quality of the merchandise purchased, you may have
other rights under the Act. If you have questions about the Fair Credit Billing
Act, write for the free brochure Fair Credit Billing. Write: Consumer Response
Center, Federal Trade Commission, Washington, D.C. 20580. FOR MORE INFORMATION The Federal Trade Commission publishes a series of Facts for Consumers on a variety of topics. For a free copy of Best Sellers, a complete list of consumer and business publications, contact: Consumer Response Center, Federal Trade Commission, Washington, DC 20580; (202) FTC-HELP (382- 4357); TDD: (202) 326-2502. Most of the brochures listed on Best Sellers also are available at www.ftc.gov. FOR
ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-800-232-1477 E-mail: lawyer@lawwalk.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. |
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