As consumers we are protected by the law more so than if we were to enter into agreements as a business but it is still important to read and be clear about what you are buying, signing or agreeing too.

When we buy goods in shops unless it is faulty there is no automatic right to return, however most shops will offer this as a gesture of goodwill. It instills confidence in the buyers mind and after all if all the competitors are doing it then it makes sense to offer this too.

So if you entered into the contract over the phone, online or on your doorstep, you have 14 calendar days to cancel the contract under the Consumer Contracts Regulations. This cooling-off period starts the day after you agree to go ahead with the service.

If you enter into a credit agreement then you rely on the Consumer Credit Act to cancel within 14 days.

Often sales people will use this as a benefit and try and close deals in the hope that customers won’t cancel or change their mind. Recently a family friend had done just that and agreed to sign up to something on the basis that he had 14 days to cancel. The credit agreement was drawn up and a deposit was taken, however where it gets a little tricky and confusing for the average customer is when there are 2 companies involved (or 3 as it seems in this case). A few days later he found a better deal and wanted to cancel.

The agreement was with company A for the service/goods but the finance was provided by company B. Funnily enough when it was decided that he wanted to cancel, company A failed to respond to texts or emails. Finally on day 13 they responded saying ‘suggest you contact the finance company (Company B) with no contact details’ this is absolutely terrible customer service and not in spirit of the law.

Luckily he had already got me to look over the agreement whilst waiting for a response from company A. There were 3 ways of cancelling, telephone (which he was fobbed off on), email (with an email address) and post (with a postal address). He emailed his cancellation notice and I also told him to contact the financial ombudsmen. The ombudsmen got back to him before Company B did. He has since had confirmation that the agreement has been cancelled, but yet to see his deposit returned. The direct debit still remained active however and was set up for £625.07 and not the £130.75 which was agreed for 36 months. Luckily his bank notified him the day before so he was able to cancel it.

I wrote an essay on unfair contracts beginning of the year for my Business Law masters and my point remains the same. Yes as consumers, the law is there to protect us, trading standards are there to hold these companies to account but unless there are multiple complaints then companies continue to keep getting away with this ill treatment and carry on trading.

My advice …

  • only enter into credit agreements with the view that you 100% want to go ahead, yes rely on the 14 day cooling off period should you need to but be aware that with the number of companies involved it may not always be so easy.
  • Should you cancel with the company make sure any active direct debits are cancelled too. Trying to claw back more money or getting fines from your bank is only going to add to the problem.
  • Follow the instructions on their agreement on how to cancel. Take what the sales person said as gospel and make sure you know how to cancel and do so within the time frame.
  • Email is always best as you can clearly keep it as evidence with the timestamp.

This particular credit agreement was also in breach of GDPR including how they pass on details for marketing purposes and charging a £10 fee for a subject access request. If you’re signing anything, read it carefully and ask questions if you are not sure.

Contact me for any contractual or commercial legal advice