The only way to guarantee you're not penalised for cancelling a contract is to cancel within the cooling off period.
Follow our step-by-step guide to cancelling with your service provider and avoiding hefty penalty fines.
1 Write to the service provider
If you want to cancel your contract, such as a mobile phone contract, you must write to the supplier within the cooling off period to tell it you want to cancel your agreement.
If you're close to the end of your cooling off period, you'd be better sending an email. If you were given a cancellation form when you signed your contract, you can use that.
Otherwise, you must clearly outline your intention to cancel your agreement in the letter or email that you write.
2 Keep a record of all correspondence
Keep a copy of all letters and emails you send to the supplier of your contract.
As long as you send your cancellation notice to your service provider before the end of the cooling off period, it doesn't matter when it's received.
If you're sending a letter in the post, be sure to send it recorded delivery. If you send an email, make sure you keep a copy of the email.
You don't need a reason to cancel your contract. If you've paid a deposit ask for it to be returned.
3 Escalate your complaint
If the company refuses to let you cancel or refuses to refund your deposit, write again stating that you're legally entitled to cancel within the cooling off period and you're entitled to get your money back.
Warn the trader or supplier of your contract that if it continues to refuse to send your refund, you'll have to consider taking court action.
Tell the supplier that you'll also report it to your local Trading Standards department.
If you need dedicated legal advice, you can speak to a Which? Legal Service lawyer who may be able to help you.
4 Act within the cooling off period
If you want to cancel a credit agreement, the Consumer Credit Act gives you a 14-day cooling off period to cancel the agreement.
If you entered into the contract at home, your place of work or during an excursion you have a seven-day cooling off period.
If you contract for a service over the phone or online, the cooling off period starts the day after you agree to go ahead with the service.
If you want the service to begin straight away, you waive any cooling off rights.
If you buy a product over the phone, online or by mail order the Distance Selling Regulations give you a seven day cooling off period from the day after you receive your goods to cancel.
Cite the relevant legislation in all your correspondence with the trader when explaining you wish to cancel your contract.