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The cooling-off rule

Once a contract of sale is concluded, it is legally binding and consumers cannot simply change their mind and ask for a money refund.

Once a contract of sale is concluded, it is legally binding and consumers cannot simply change their mind and ask for a money refund.

Many consumers have misconceptions about their legal rights and therefore are not always aware of what type of remedy they may claim when they have problems with products purchased.

A common misconception concerns the right to cancel a sale and claim a refund of the money paid. Consumers often think that any purchase may be cancelled within a period of time as long as they have not used the product or service. Unfortunately, if there is nothing wrong with the item purchased, this is not the case at all.

Once a contract of sale is concluded, it is legally binding and consumers cannot simply change their mind and ask for a money refund – unless the seller has a voluntary return policy that allows customers to do so and return unwanted products in exchange for a refund.

The exception to this rule is when consumers make their purchases through a distant means of communication, such as online or when they buy goods or services at a location which is not the business premises of the trader.

When making these types of purchases, consumers are entitled to a 14-day cooling-off period. During this time consumers can change their mind about the purchase made, cancel the sale and claim back any money paid to the seller.

The law requires sellers to inform consumers about these cancellation rights before and when the sale is concluded. If this information is not provided, then the cooling-off period is extended to one year from the date of the contract of sale or to 14 days from the date consumers are duly informed about their cancellation rights.

The 14-day cooling-off period commences from the day the consumer acquires physical possession of the goods. In the case of service contracts, the withdrawal period expires after 14 days from the conclusion of the sales contract.

When exercising this right to cancel a sale, consumers are not obliged to provide a reason for their decision and should not incur additional costs. The only costs consumers are obliged to pay are those connected to the return of the unwanted goods to the seller. However, consumers must be clearly informed about these costs, otherwise they must be paid by the seller.

When consumers decide to make use of these cancellation rights, the distance or off-premises seller must be informed as soon as possible and before the cooling-off period expires. The safest way to cancel such contracts is in writing so consumers have proof that cancellation took place within the stipulated time limit.

Once a distance or an off-premises sale is cancelled, the trader is obliged to reimburse the money paid by the consumer within 14 days from the date the trader has been informed of the consumer’s decision to cancel the sale. The seller must also refund the cost of standard delivery for the item.

If, however, at the time of purchase the consumer has chosen a more expensive delivery option, they will have to pay the difference.

The trader may withhold the reimbursement until he receives the unwanted goods from the consumer or until the latter has supplied evidence of having sent back the goods.

When consumers need to return unwanted items, it is important that they check if the seller has provided any instructions on how to execute such return. The law does not oblige consumers to return goods in their original packaging, but consumers are responsible to take all necessary precautions so that the item does not get damaged on its way to the seller. If a product gets damaged because it wasn’t packaged properly, consumers may have to pay for these damages.

As to off-premises contracts, if the goods have been delivered to the consumer’s home, the seller must collect back the goods at his own expense, if by their nature they cannot be returned by post.

Odette Vella is director, Information, Education and Research Directorate, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.

odette.vella@mccaa.org.mt

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