Credit agreements at a distance and cooling-off periods
The CCA 1974 covers both credit agreements made at a lender’s premises and those entered ‘at a distance’. These are credit agreements made online, over the phone, in a client’s home with a representative or elsewhere, such as a pop-up business stand.
The CCA 1974 acknowledges that for distance credit agreements, clients might be making a decision that is hasty or on reflection not suitable. For this reason, it provides a ‘cooling-off period’ during which clients have the right to cancel a credit agreement.1s68 CCA 1974 Creditors must provide clients with a copy of their cancellation rights with the credit agreement. This must be sent by post or email within seven days. Clients then have five days (not including the day they received the documents) to cancel.
If a client decides to cancel, the credit agreement is treated as if it never existed. Clients must repay any monies or return any goods that have been received.
An example of a cancellable agreement is when a double-glazing salesperson calls on a client at home and persuades the client to sign a credit agreement for replacement windows.