New 14 day rule to cancel credit agreementsConsumer Credit Directive comes into force

01 February 2011

Store cards for high-street credit

Many high-street retailers offer store credit cards

UK consumers now have 14 days to cancel credit agreements as a result of the Consumer Credit Directive (CCD) coming into force today.

The most beneficial change to the UK consumer, brought about by the Directive, is the 'right of withdrawal', the ability to cancel a contract agreement, within 14 days.

Right of withdrawal

Until now, consumers have had greater protection from the law when purchasing financial products over the phone or on the internet as they were covered by the seven day cooling off period under distance selling rules.

Consumers had no get out clause when entering into a credit agreement in person. The Directive gives consumers protection where it was not available before.

It also gives extends the time in which you can cancel an agreement when placed on the phone or on the internet.

Which? believes this is an important change as a consumer has more time and information to make an informed decision over their choice of agreement.

Consumer Credit Directive

The Consumer Credit Directive (CCD) was adopted by the European Council in May 2008. It was designed to give greater protection to consumers in EU countries. Member states were supposed to have implemented the Directive by June 2010. The UK legislation that companies must adhere to came into force on 1 February, alongside some additional changes to the Consumer Credit Act.

The majority of the changes in the Directive have little impact on UK consumers who were already protected by equivalent, and in some cases more protective, legislation.

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.