FTC proposes changes to ‘cooling off’ rule

The Federal Trade Commission is proposing changes to the three-day “cooling off” rule, according to a press release. Currently, the rule protects consumers from an aggressive door-to-door salesperson, allowing the consumer to cancel any purchase or contract within three days if the sale meets certain criteria.

The law states that a salesman must tell you about the three-day cooling off period and provide you with two copies of a form to cancel. You are supposed to keep one copy for your records and send the other. If you want a refund, simply mail the form back to the salesman by midnight on the third day after purchase. If the salesman did not provide you with a form, double check that your purchase was covered by the cooling off rule. If so, you get additional time to cancel, but it still must be done in writing.

Here are the exemptions to the law, according to the Texas Attorney General’s Office:

There is no three-day right of rescission for goods or services purchased for less than $25, or for the purchase of insurance and farm equipment. Other exceptions are real estate purchases of less than $100 made at a place other than the merchant’s place of business, a sale involving an attorney or broker, and sales made pursuant to prior negotiations at the merchant’s business establishment, where the sale is the result of those negotiations. Finally, the law does not apply to sales conducted entirely by mail or telephone, with no other contact between the buyer and seller.

The FTC’s changes would up the exemption amount from $25 to $130 — an adjustment for inflation. The rule was first enacted in the 1970s. You may comment on the proposed change online until March 4.

Here are a few more things to remember about the cooling off rule, and who to contact for more information, according to the AG’s office:

  • The three day right of rescission does not apply to all consumer transactions
  • Cosigners will be held liable for contracts
  • Consult with an attorney before you sign a contract if you have questions

For a copy of the Chapter 39, Cancellation of Certain Consumer Transactions of Texas Business and Commerce Code:

Texas State Law Library
Post Office Box 12367
Austin, TX 78711
(512) 463-1722

For information on federal cooling off laws:

Consumer Response Center
Federal Trade Commission
600 Pennsylvania Ave. NW
Washington, DC 20580
877-FTC-HELP (382-4357)

For assistance in locating a private attorney contact the State Bar of Texas at (800) 252-9690 or http://www.texasbar.com