Rights of withdrawal/cancellation

There are a number of pieces of legislation that give consumers the right to either withdraw or cancel depending on how the agreement is entered into (such as face to face, distance or doorstep selling) or the nature of the agreement.

The right to withdraw from most credit agreements after entering into them comes from the CCA (see Section 66A of the CCA).  This gives the customer a right to withdraw after entering into many regulated credit agreements, without giving any reason, within 14 days of the day after execution by both parties of the regulated credit agreement.

The 14 day period begins the day after the date the agreement is made (signed by both parties) or the day on which the consumer receives either a copy of the executed agreement (or confirmation of execution in some cases) whichever is the later.  Notice of withdrawal can be given in any way and, if the consumer does withdraw, he must repay the credit and any interest that has accrued for the time that he has had the credit within 30 days.  In withdrawing from the finance agreement the customer does not, however, withdraw from the contract to acquire the vehicle, which must be paid for using other funds.

This right does not apply where:

  • the agreement is for credit in excess of £60,260 (the maximum introduced by the European Consumer Credit Directive);
  • the agreement is secured on land;
  • the agreement is a restricted credit agreement to finance the purchase of land;
  • the agreement is for a bridging loan in connection with purchase of land.