Canceling a Contract/Getting a Refund FAQ

Frequently asked questions about canceling a contract or getting your money back.

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I just signed a contract to have carpeting installed in my house and I changed my mind. Can I cancel?

Possibly. Under the Federal Trade Commission's Cooling Off Rule, you have until midnight of the third business day after a contract was signed to cancel either of the following:

  • door-to-door sales contracts for more than $25, or
  • a contract for more than $25 made anywhere other than the seller's normal place of business -- for instance, at a sales presentation at hotel or restaurant, outdoor exhibit, computer show or trade show (other than public car auctions and craft fairs).

Every state has enacted a similar law.

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Do I have the right to cancel any other kinds of contracts?

A federal law called the Truth in Lending Act lets you cancel a home improvement loan, second mortgage or other loan where you pledge your home as security (except for a first mortgage) until midnight of the third business day after you signed the contract. The lender must tell you about your right to cancel and must give you a cancellation form when you sign the loan papers. This three-day period may be extended for up to three years in certain circumstances.

In addition, many states have laws that allow you to cancel written contracts covering the purchase of certain goods or services within a few days of signing, including contracts for dance or martial arts lessons, health club memberships, dating services, weight loss programs, time share properties and hearing aids. Call your state consumer protection agency to find out what contracts, if any, are covered in your state.

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I ordered some clothes through a catalogue and there's a delay in shipping. Can I cancel my order?

If you order goods by mail, phone, computer or fax (other than photo development, magazine subscriptions, seeds or plants), the Federal Trade Commission's Mail or Telephone Order Rule requires that the seller ship to you within the time promised or, if no time was stated, within 30 days.

If the seller cannot ship within those times, the seller must send you a notice with a new shipping date and offer you the option of canceling your order and getting a refund, or accepting the new date. If you opt for the second deadline, but the seller can't meet it, you must be sent a notice requesting your signature to agree to yet a third date. If you don't return the notice, your order must be automatically canceled and your money refunded. The seller must issue the refund promptly -- within seven days if you paid by check or money order and within one billing cycle if you charged your purchase.

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Do I have the right to a cash refund after I make a purchase?

Generally, no. A seller isn't required to offer refunds or exchanges, though many do. However, some states do have laws governing refund policies

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