is always 20-20. That new kitchen didn't seem so wonderful after you looked for
a while at your signature on the $20,000 remodeling contract. What do you do when
the thrill is gone and your worries balloon into major anxiety? Fortunately, if
you act fast enough, you can cancel a contract signed in your home with no questions
asked, thanks to the federal 3-Day Cooling Off rule.
In most situations,
if you buy something at home, anything from a vacuum cleaner to major remodeling
job, you're protected by the Federal Trade Commission's (FTC) Cooling-Off Rule.
As long as the item costs $25 or more, the Cooling-Off Rule gives you three days
to cancel the purchase. The Cooling-Off Rule applies to sales at the buyer's home,
workplace or dormitory. It even applies to facilities rented by the seller on
a temporary or short-term basis, such as hotel or motel rooms, convention centers,
fairgrounds and restaurants.
Suppose the roofing company salesperson comes
to your home, and says if you act now on the fall season special, he'll give you
a special deal on a new roof. You sign the contract and put down a deposit. But
a day later you wonder whether the deal is so special, after getting other estimates.
Don't worry, your right to cancel for a full refund extends until midnight of
the third business day after the sale. In fact, the salesperson is required to
tell you about your cancellation rights and give you two copies of a cancellation
form (one to keep and one to send) and a copy of your contract or receipt. The
contract or receipt should be dated, show the name and address of the seller,
and explain your right to cancel.
If the seller did not give you cancellation
forms, you can write your own cancellation letter. It must be post-marked within
three business days of the sale. (Saturday is considered a business day; Sundays
and federal holidays are not.) You don't need to give a reason for canceling your
purchase under the FTC rule. It's OK to change your mind. Because proof of the
mailing date and proof of receipt are important, consider sending the cancellation
form by certified mail so you can get a return receipt. Or, consider hand delivering
the cancellation notice before midnight of the third business day. Keep the other
copy of the cancellation form for your records.
Remember, the Cooling-Off
Rule does NOT cover sales that are: