Know your rights
You can cancel your credit contract within a set time frame from the date you receive a copy of key information in the disclosure statement under the Credit Contracts and Consumer Finance Act. This time period for cancelling or cooling off period varies if the contract was:
- handed to you directly – you have five (5) working days to cancel
- sent to you electronically (email, fax etc) – you have seven working days after the email / fax was sent to cancel
- mailed to you – you have nine working days after it was posted to cancel.
Saturdays, Sundays and public holidays are not working days.
If you don’t receive a copy of the key information or it is wrong, incomplete or illegible, you can cancel at any time.
You must cancel your credit contract in writing, in any way that shows you intend to cancel or withdraw from the contract.
You can give notice to the trader or finance company by:
- giving or posting it
- using electronic methods, eg email if the trader or finance company has earlier agreed to receive notices this way.
The trader or finance company can charge you a fee to cover any reasonable costs involved in preparing products for sale or preparing your credit contract. These costs may cover surveys, credit reports and incidental services, such as inspections and alterations.
You can cancel for any reason within the first 5 working days of receiving key credit disclosure information.
Returning products after you cancel your credit contract
If you’ve taken the products home and the correct disclosure has been made, you can cancel your credit contract, but not the sales contract. You still have to pay the cash price of the products within 15 working days.
If you haven’t taken the products home, you can cancel your credit contract and return the products.
If you’ve taken the products home and the correct disclosure has been made, except for information on your right to cancel, you can cancel your credit contract and return the products.
If you’ve taken the products home but the correct disclosure has not been made, you can cancel your credit contract and return the products.
Keeping products or services after you cancel your credit contract
After you cancel your credit contract, you can keep the products if:
- you have full disclosure
- you bought property at auction
- you’ve already received services (but you must pay the cash price or the balance owing to the finance company within 15 working days).
The finance company can charge interest at the contract rate from the day you received the products until you pay the full cash price.
Other rights to cancel that might apply
You have the right to cancel a consumer credit contract in the following situations:
- The trader offers a ‘right of return’ guarantee so that you can change your mind.
- The products are substantially faulty or do not substantially match the sales description.
- You bought the products under an uninvited direct sale agreement, such as a door-to-door sale.
- The credit contract has oppressive terms that the lender refuses to change. You can apply to the Disputes Tribunal and request that the contract be varied or cancelled.
Varying your credit contract
With any variation to your credit contract made on or after 6 June 2016, the lender must comply with the Lender Responsibility Principles. They must exercise the care, diligence and skill of a responsible lender in all their dealings with you.