As the law applies currently in Britain, if you take out a loan agreement away from company premises, (eg at home, over the phone or internet) you have five days to change your mind.
So if you agree to a loan or hire purchase agreement in a bank or car showroom, you have no cooling off period and no right to change your mind.
However the EU is looking to close this loophole by passing a directive on consumer credit that will give consumers 14 days to consider what they have agreed to regardless of where they have made the deal.
The Citizens Advice Bureau (CAB) says that cancellation rights for credit transactions can help consumers to cancel purchases that they would normally be committed to seeing through. They give an example of a person that came to them for help. This consumer had been pressurised into buying an orthopaedic bed costing £2,300. The salesman had called after an appointment was made in advance so she had no right to cancel. The salesman stayed for four hours. Unfortunately for this consumer, because she didn’t sign up to a linked credit agreement she was not able to cancel the purchase using the given cancellation rights.
A spokesman for CAB said, "Cancellation rights provided through the sale of credit have proved valuable. They also need to illustrate the need for the right to cancel to be extended to solicited doorstep sales."
EU set to change cooling off periods for loans
Thu, 05 Jan 2006
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