Understanding the Three-Day "Cooling Off" Rule

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. 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 sales person 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.

However, there is some exception to the Cooling-Off Rule. The rule does NOT apply to:

sales made at the sellers' usual place of business;
sales made totally by phone or mail;
sales for real estate, insurance or securities;
sales for emergency home repairs.
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 have a complaint that may concern the Cooling-Off Rule the BBB suggests you contact: If you paid by credit card and a billing dispute arises, you should notify the credit card company and dispute the purchase.

Fair Trade Commission (FTC)
Consumer Response Center
Washington, DC 20580
www.ftc.gov

New York State Department of Law
Attorney General's Office
800-771-7755
www.oag.state.ny.us

Better Business Bureau
www.bbb.org

This information is general in nature, and is not to be interpreted as a reliability report on any specific company.