Cooling-off rule

The FTC’s Cooling-Off Rule (16 CFR Part 429) covers a sale of consumer goods or services where the seller personally solicits you and you agree to buy somewhere other than the seller’s place of business. The rule gives examples: your home, a hotel room or convention centre the seller has rented, your workplace or a dormitory lounge. It applies at a purchase price of $25 or more if the sale is at your home and $130 or more at other locations.

In a covered sale the seller must give you a completed receipt or contract and two copies of a notice of cancellation, and must tell you orally that you can cancel. You may cancel up to midnight of the third business day after the sale. The seller then has 10 business days to refund your payments. The rule makes it an unfair and deceptive practice to misrepresent your right to cancel or to refuse a valid cancellation.

Know the limits. The rule excludes sales conducted and completed entirely by mail or telephone, sales where you started the contact for a genuine immediate emergency and signed a handwritten waiver, and sales where you asked the seller to visit to repair or maintain your property. In a covered sale, a salesperson who skips the cancellation notice is breaking the rule. A scam run entirely by phone is outside it.