Cancellation fee during cooling-off period

Cancellation fees during the cooling-off period:

The short answer is: generally no, but there are some limited exceptions where a business can make certain deductions.

Legal position:

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 give consumers a 14-day cooling-off period for most contracts concluded at a distance (online, phone) or off-premises (for example, at your doorstep). During this period you have the right to cancel without giving any reason and without incurring any liability, subject to only narrow exceptions.

A business cannot charge a "cancellation fee" or penalty for exercising your right to cancel within the cooling-off period. Any contract term purporting to impose such a fee would likely be unenforceable, and could also be challenged as an unfair term under the Consumer Rights Act 2015, Part 2.

What a business can legitimately deduct or charge:

1. If you requested that a service begin during the cooling-off period (and the business gave you proper notice that you would lose your right to cancel once the service was fully performed), the business can charge you a proportionate amount for the service already provided up to the point of cancellation.

2. If you received goods and they have diminished in value because you handled them beyond what was necessary to establish their nature, characteristics, and functioning (essentially more than you would in a shop), the business can reduce your refund accordingly.

3. You may have to bear the direct cost of returning goods, but only if the business informed you of this before you entered the contract. If they failed to inform you, they must bear that cost.

Important qualifications:

The cooling-off period does not apply to all contracts. Notable exclusions include contracts for accommodation, transport, leisure activities for a specific date, sealed audio or video recordings or software once unsealed, personalised or perishable goods, and some others listed in regulation 28.

The 14-day period runs from the day after delivery of goods, or from the day after the contract is made for services or digital content.

Practical steps if a business is trying to charge you:

1. Write to the business clearly stating you are exercising your right to cancel under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and that a cancellation fee is not lawful during the cooling-off period.

2. If they refuse to refund or insist on the fee, you can raise a complaint with Trading Standards (via Citizens Advice consumer helpline) or, for card payments, consider a chargeback or section 75 claim through your card provider.

3. If the amount is significant and informal resolution fails, a claim in the county court (small claims track for amounts up to ten thousand pounds) is an option, though for smaller sums the chargeback or section 75 route is usually quicker and less stressful.

If you can give me more detail about the type of contract, how it was entered into, and what the business is saying, I can give you a more tailored answer.