Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, June 4, 1990 TAG: 9008070397
SECTION: EXTRA PAGE: E-6 EDITION: METRO
SOURCE: Tammy Poole
DATELINE: LENGTH: Medium
Contract cancellation rights vary according to the type of product or service, and where and when you signed the contract.
Here are the general cancellation policies for various types of contracts from the Virginia Citizens Consumer Council, a volunteer consumer advocacy group based in Arlington.
Cancellation rights for car purchases are confusing to many consumers, particularly when a dealer urges a consumer to take the car home before a loan has been arranged.
Some customers may not realize they are committing themselves by signing a buyer's order or a sales contract.
Usually that document authorizes the dealer to repossess the car if the buyer doesn't make arrangements for financing or defaults on payments. The consumer is responsible for any respossession costs. Neither federal nor state law gives consumers a right to cancel a car purchase contract at no cost after they've taken possession of the car.
There are specific cancellation rights for purchases made in the home or by telephone, such as encyclopedias, magazines, home improvements, and water treatments.
The Virginia Home Solicitation Sales Act and the Federal Trade Commission's trade rule on door-to-door sales gives consumers three business days to cancel purchases over $25. Sales contracts are required to include a specific provision about cancellation and give information about how to cancel the contract. Purchases of real estate, insurance, and securities are exempt from these laws.
If an in-home solicitor has misrepresented his purpose or failed to identify himself as a seller, Virginia residents have 30 days to cancel the contract. For example, if you responded to an advertisement for a free water quality test and then signed a contract for a water purification system, you could cancel the contract within 30 days if the ad did not identify the company as a seller of water purification systems.
Health spa memberships, vacation time-shares, and home equity lines of credit also have cancellation rights.
The Virginia Health Spa Act requries membership contracts to contain a provision allowing cancellation and giving the consumer three business days to cancel the membership.
The Virginia Real Estate Time-Share Act requires cancellation provisions in contracts and gives the consumer seven business days to cancel the purchase. However the law applies only to companies registered with the Virginia Division of Consumer Affairs in Richmond. If you're considering buying a vacation time-share outside Virginia, check the consumer protection laws within the state where the property is located.
The federal Truth in Lending Act gives consumers three days to cancel a home equity line of credit, and the creditor must return all fees - including any application and appraisal fees - paid when the account was opened.
Before signing a contract, read it carefully and look for a cancellation provisions. Don't be pressured into an immediate decision and be especially wary of offers that are "good for today only."
***CORRECTION***
Published correction ran on August 7, 1990
Correction
Due to incorrect information provided the newspaper, a June 4 Quickline article on contracts and cancellation contained incorrect information about how the state regulates companies that sell time-share resort properties. The state Division of Consumer Affairs does not regulate or require time-share companies to register. Time-share companies are regulated by the state Department of Commerce. Maria Everett is in charge of time-share administration at the department and can be reached at (804) 367-8500.
Memo: CORRECTION