Sunday, March 6, 2011

The Right to Cancel a Credit Card Purchase

The Right to Cancel a Credit Card Purchase

In the marketplace, the power in a transaction often rests with the selling party. This is why so many state and federal laws exist to protect consumers in case they enter into a fraudulent purchase agreement or are in some other way taken advantage of during a transaction. Thanks to these laws, consumers have the right in some circumstances to cancel a credit card purchase to receive their money back.

Home Solicitation

    Consumers generally have the right to cancel a purchase within three days if the purchase was not made at the selling company's regular place of business. The Federal Trade Commission calls this the cooling-off rule, and it applies to all goods except those under $25, transactions entirely made by either telephone or mail and goods sold at fairs or conventions. If a consumer cancels a credit card purchase, the seller must refund the purchase to the credit card account within 10 days.

Retail Layaway

    Consumers who have entered into a layaway payment agreement with a company for a good or service has the right to cancel that agreement at any time for a refund. Payment plans made for layaway purchases are often subject to both the Federal Trade Commission Act, which prohibits companies from deceptive practices in consumer contracts, as well as the Truth in Lending Act.

Fraudulent Purchases

    When a credit card is stolen, the consumer from whom the card was stolen has certain protections under federal law for charges he did not make. Charges for an item that you did not agree to buy, as well as a charge incurred by somebody who is not authorized to use the account, are considered billing errors under the Fair Credit Billing Act. Some credit card companies offer zero customer liability for unauthorized charges, but even without this protection, a customer is liable for only $50 worth of fraudulent purchases per stolen credit card.

In Good Faith

    Laws concerning consumer protections and company purchase policies regarding purchase cancellations require a consumer to act in good faith to receive the fullest refund possible. "In good faith" typically means that when there is a conflict regarding the purchase, a customer has acted reasonably in all matters regarding the purchase cancellation. This includes reporting purchase cancellations as soon as you decide to cancel your purchase and speaking respectfully to the business representative handling your cancellation.


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