What is a cooling-off period?

In the UK, the Consumer Contracts Regulations give consumers the right to change their mind via a 14-day cooling-off period on most goods and services purchased online, over the phone or via mail order. Read on to find out how cooling-off periods work, what they apply to, and how to exercise your rights.

A ‘cooling-off period’ refers to the timeframe a consumer has to change their mind after purchasing goods or services online, over the phone or via mail order.

A cooling-off period is a form of consumer protection. It protects consumers when purchasing goods they haven’t had the chance to view or inspect in person, such as clothes or electronics. For services, the cooling-off period gives the customer time to reconsider their options before being tied into a contract or agreement.

Yes. In the UK, the Consumer Contracts Regulations established the minimum cooling-off period at 14 days. Some retailers may offer a longer cooling-off period but, by law, retailers and service providers who offer goods and services online must offer at least 14 days.

For goods, the 14-day cooling-off period in the UK begins when you take ownership of whatever you’ve purchased – although you have the right to cancel your order before you’ve received the goods, too. You have 14 days from the date of cancellation to return the goods. The retailer should refund any delivery fees you paid, although you will likely have to pay for the cost of the return.

The cooling-off period for services begins the day after you’ve signed up for a service or signed a contract. During this time, you can request the cancellation of services by contacting the service provider in writing (email, letter, or via a dedicated cancellation link). You should receive any deposits you’ve paid back, although you may be liable for any costs for services you requested between signing the agreement and ending it.

No. There are some notable exceptions to the cooling-off period:

• Goods or services purchased in-person: If you buy a product or service in-person or on a business’ premises, the cooling-off period does not apply. Most retailers offer their own returns policy, however.
• Fast perishing goods, like flowers and food (for obvious reasons)
• CDs, DVDs and other media if the protective seal is broken: This prevents someone buying a product, ‘using’ it, then returning it for a refund.
• Digital content, such as music and films: The 14-day cooling-off period only applies to digital content if you don’t download it. This stops consumers making a copy of a file and requesting a refund (in effect keeping the product and getting their money back).

Certain services are exempt from the UK’s 14-day cooling-off period as well:

• Hotel bookings
• Vehicle hire
• Courier and moving services
• Catering and leisure services
• Urgent repairs and maintenance
• Some financial products and services (see below)

While the minimal period set by law in the UK is 14 days, a cooling-off period can be as long as a retailer or service provider prefers. Some will offer longer than the legally mandated cooling-off period, so it’s important to read any terms and conditions and/or agreements before making a purchase or committing to a service.

No, not all contracts have a cooling-off period. The main exemptions are listed above, but it also applies to contracts signed in person or on a company premises. It’s advisable to review contracts carefully and, if necessary, seek legal advice before committing.

Yes, for the most part, although banks and building societies are not legally required to provide a cooling-off period in the UK. The cooling-off period that applies depends on the type of product you’re signing up for.

In general, easy access savings accounts can be closed at any point without penalty. You should refer to your bank or building society’s terms and conditions first, though.

Fixed rate bonds aren’t subject to a legal 14-day cooling-off period, but some banks and building societies may provide one. Again, you should consult the terms and conditions before signing up if you’re unsure. Some fixed rate bonds offer early withdrawal, but will usually charge a fee or loss of interest. Other fixed rate bonds offer no early access or closure under any circumstances.

Notice accounts may include a 14-day cancellation period, but this varies depending on the bank or building society. Again, refer to the terms and conditions if you’re unsure.

Cash ISAs are subject to a 14-day cooling-off period in the UK. During this time, you can close your account without penalty and without affecting your yearly ISA allowance.

Stocks & Shares ISAs can also be closed with a 14-day cooling-off period, but you may incur losses if your investments fell in value before you cancelled your account. You won’t receive a refund on any admin or account fees paid while your account was active.

Credit cards and loans can be cancelled within 14 days of signing up. You’ll need to return any money loaned within 30 days of cancellation.

Finance agreements, such as car finance, are more tricky. You are entitled to cancel your finance agreement within 14 days, but you may not be able to cancel the agreement to purchase the item. In this instance, you’d need to find an alternative source of finance.

While there isn’t a legally-binding cooling-off period for mortgages, most will allow you to cancel at any time before funds are transferred. You may still be liable for any costs incurred up to the point of cancellation, however.

Before cancelling a mortgage agreement, be aware that you’re legally obligated to continue with a property purchase if you’ve already exchanged contracts. As such, you’d need to find another source of funding.

The 14-day cooling-off period applies to almost all insurance policies, including car, home and pet insurance.

Annual travel insurance policies include a 14-day cooling-off period, but single trip or short-term policies don’t.

Longer-term policies like life insurance, critical illness cover, income protection and payment protection insurance have a 30-day cancellation period. The 30-day cancellation period doesn’t apply to policies that can be cashed in, however. Policies purchased in-person from a broker may not qualify for a cooling-off period, either.

You can opt out of a pension scheme within 30 days and any contributions will be refunded.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

Goods can usually be returned using the retailer’s standard returns policy, although you may need to contact the retailer directly if their stated returns period is shorter than the 14-day cooling-off period (though, in most cases, retailers will give you at least 14 days to comply with regulations).

Services can usually be cancelled by contacting the provider during the cooling-off period. Consumer experts suggest communicating in writing so you have a record of any correspondence, just in case you need it. Any deposits should be refunded, although you may be liable for the cost of any services provided at your request before cancelling.

If a retailer or service provider is refusing to refund you as per the Consumer Contracts Regulation, you could contact Citizen’s Advice on 0808 223 1133 to discuss your options. You may be able to negotiate a resolution, or proceed through an alternative dispute resolution scheme. However, some cases may ultimately end up in a small claims or county court (which is why written correspondence is recommended). 

The 14-day cooling-off period isn’t guaranteed if you’re dealing with a retailer or service provider from abroad. While you’re still protected by UK consumer law, pursuing and securing a refund from a company outside of UK jurisdiction is difficult and potentially expensive.

After the cooling-off period, you’re subject to the terms agreed when you purchased the goods and or committed to a service. This may include a right to cancel, but the retailer or service provider will have the right to charge a fee. Some agreements won’t include a cancellation policy at all, but you may be able to negotiate an exit by talking directly to the retailer or service provider.

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