It is always very easy to sign up for a service or to buy a product, but have you ever noticed that it’s not quite as easy to pull out if you change your mind.
However, in some situations you do have a legal right to withdraw within certain timeframes, consumer expert Tina Leonard tells Pat Kenny. (Podcast here)
For other contracts, like for mobile phone or TV services, you need to be careful and check how and when you can cancel the contract if you want to, before you decide to buy in the first place.
Legal rights of withdrawal
This covers online shopping for goods and services (exceptions are time specific services, periodicals, food, customised goods), and also sales that take place over the phone or via catalogue.
You have a seven-day cooling off period where you can contact the seller (in writing) to let them know you are pulling out. You don’t have to have any specific reason for cancelling.
This is a sale that takes places following a visit by a tradesman to your door, or one that takes place in your work place for example; in other words the deal is concluded away from the business premises.
You are entitled to a withdrawal period of seven days, and that starts from the day you send your letter to the business telling them you are cancelling.
To have this right the sale must be above €40 and be unsolicited.
New timeshare legislation was signed into Irish law in February so consumers have greater protection now than before.
You have a fourteen-day cooling off period once a timeshare contract is signed (previously it was ten days).
Also a timeshare is now described as a contract that lasts at least a year, so this should include holiday club contracts also.
A new Consumer Credit Directive was signed into Irish law last June 2010 and it increases the length of time you have to withdraw from a contract for a loan for example.
You now have a fourteen day right of withdrawal starting from the time both parties have signed the contract. This right is thirty days when it comes to life insurance.
Furthermore, you cannot waive or sign away this right, as you could have before this new legislation.
What about other contracts?
‘Buyer beware’ is the typical but probably most useful thing to bear in mind here. Reading the terms and conditions, especially relating to cancellation, is the best thing you can do.
Mobile phone contracts
Many of these contracts have a 12 month minimum period, although more and more they are offering 24 month and even 36 month contracts. I’ve also noticed that some companies advertise the lower price offered for the longer contracts up front, so you notice this price first and may be more likely to buy into a longer contract period.
What you need to know:
You will have to give approximately 30 days notice in writing to cancel your contract. Make sure you do this more than one month before your contract is up, as otherwise, you’ll have to pay the extra month.
Is there any way out mid-contract?
Your best hope is that the mobile service provider themselves change a significant term of your contract, because then they have breached their contract with you and you can cancel. Most likely there is a provision in their terms & conditions that some charges may vary to a specified extent for example, but if a particular service is stopped or some big change occurs you are entitled to cancel.
But pay attention to how you have to cancel even in a situation like that, for example, you still may need to give thirty days notice from the time you were notified on the change.
Your only other option is to downgrade or change to a tariff that suits you better within the initial contract term, although you may only be allowed to do this after 6 months for example.
If you quit within the initial contract period, you’ll be liable for the monthly recurring charge until the end of the contract period.
For TV services it’s pretty similar to mobile phone services in that you sign up for a particular time period, and then you are more or less stuck with the service, at least until the contract period is up.
You will have to give one month’s notice (or 31 days with Sky) to cancel your contract, so again do it before the start of month 11 if you are in a 12-month contract.
If the provider changes their terms and conditions, for example they withdraw a channel, then you can cancel the contract, even within the initial contract period.
But beware the timeframes: with UPC you have to write to withdraw within 30 days of notification of the change, but with Sky you only have 7 days!
If you cancel within the minimum contract period, you will either have to pay the remainder of your monthly subscriptions or an early termination charge, whichever is the lesser of the two. With UPC the cancellation charge can be up to €200.
- Beware the potential pitfalls of paying one year’s subscription in advance. Recently I heard from a consumer who had paid for her 12 month Setanta service in one payment. She wanted to cancel after the year was up but forgot to give one months notice. When she gave her notice to cancel she was told that rather losing the next one month’s payment she would have to forfeit the whole year as she had paid in advance! On complaining they subsequently refunded her the eleven extra months. In fact if this sort of term is in a contract it could be an ‘unfair term’ and therefore not binding on the consumer, as per the Unfair Contract Terms Directive. But only a high court can legally decide what constitutes an unfair term (i.e. via a case taken by the NCA or CAI).
More people may be jogging for free in the great outdoors rather than paying for running on a treadmill, but if you are a gym member you had better pay attention to how to cancel so that you don’t lose your money.
You may be in a ‘rolling contract’ where after your 6 or 12 month initial membership expires your contract simply continues, as do your direct debits, unless, that is, you cancel giving the required notice. And that can be anything from one month to three months. That means that if you forget to give the required notice the gym can keep taking payments for that extra period.
So before you join ask what the cancellation policy is and whether the contract is automatically renewed.
Credit where credit is due: In 2008 the NCA drew up guidelines for gym contracts following a surge in complaints, especially about cancellation. Ben Dunne’s gyms publically endorsed the guidelines, and in Ben Dunne gyms they have no ‘roll-on’ contracts and they will notify you before your 12 month contract is up to ask if you want to join again. If you don’t your contract expires.
Crucial mistake people make: not cancelling in writing
Just because you cancel your direct debit with the bank, this does not mean that you have cancelled your contract with the service provider, and they can still come after you for what you owe. So always cancel in writing to the provider.