Three Day 'Cooling-Off' Rule

Have you ever purchased something from a high-pressure sales person and regretted it? Well, don't resign yourself to being the proud owner of a full set of encyclopedias just yet; there may be light at the end of the tunnel. Under the federal and state mandated Three Day "Cooling-Off" Rule, consumers, in certain circumstances, have up to three days to cancel contracts. This rule is intended to protect consumers from high-pressure salespeople by allowing consumers a window to cancel contracts they may have signed while under pressure.

Under the Federal Trade Commission's Cooling-Off Rule, consumers may be able to cancel contracts for over $25 and receive a full refund until midnight on the third day after the sale under certain circumstances. The rule covers sales made at the buyer's home, workplace, dormitory, or a temporary workplace of the seller, such as hotel or motel room, convention center, fairground, or restaurant. Under the rule, salespeople must inform you about your cancellation rights and provide copies of the cancellation forms and receipts at the time of the sale. The contract or receipt must be in the same language used in the sales presentation. Also, the contract or receipt must include the name and address of the seller, the date of the sale, and an explanation of the customer's right to cancel.

In New York, the cooling-off period does not begin until the seller gives the customer a "Notice of Cancellation" form. Until this form is received, the customer can cancel the sale by notifying the seller in any manner and at any time. No reason is necessary, but it is recommended that any cancellation notice be sent in writing in the form of a certified letter with a return receipt.

In the event that a consumer decides to terminate a contract, within ten days the seller must cancel and return any signed papers, refund the money collected, return any trade-in, and inform the customer whether any products left with him or her will be collected. The merchant must retrieve any items left with the customer or reimburse the customer for goods shipped by the customer within twenty days.

However, be aware that the Cooling-Off Rule does not apply in all situations. Exceptions to the Rule are sales made at the seller's usual place of business, sales made exclusively by mail or phone, real estate, insurance, and securities sales, sales for emergency home repairs, sales that begin in the seller's usual place of business and finish with a contract signing in your home, and sales of goods or services not intended for personal, family, or household purposes.

The sale and leasing of automobiles, one of the most expensive purchases made by many New Yorkers, is not currently covered under the Cooling-Off Rule. To address this, I have sponsored two pieces of legislation (A.5151 and A.5411). The first bill, A.5151, would give consumers a three day cooling-off period to cancel contracts for automobiles sales and leases. The second bill, A.5411, would allow consumers a one day cooling-off period to cancel such contracts.

If you have any questions or concerns regarding the current Cooling-Off Rule, there are several resources available to assist you. Consider visiting the Federal Trade Commission's website at www.ftc.gov or the New York State Attorney General's website at www.oag.state.ny.us. Your local Better Business Bureau may also be able to help you. You can locate your local bureau and research consumer issues by visiting www.newyork.bbb.org or www.upstateny.bbb.org.