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Consumer Rights.

How to cancel a contract without being penalised

To ensure you're not penalised for cancelling a contract, cancel within the cooling-off period. Our step-by-step guide helps you avoid hefty penalty fines.
Which?Editorial team
How to cancel a contract without being penalised

1 Act within the cooling-off period

If you entered into the contract over the phone, online or on your doorstep, you have 14 calendar days to cancel the contract under the Consumer Contracts Regulations

The cooling-off period starts the day after you agree to go ahead with the service. 

If you want to cancel a credit agreement, the Consumer Credit Act gives you a 14-day cooling-off period to cancel the agreement. 

Cite the relevant legislation in all your correspondence with the trader when explaining you wish to cancel your contract. 

2 Write to the service provider 

If you want to cancel your contract, such as a mobile phone contract, you must write to your supplier within the cooling-off period to tell them you want to cancel. 

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. 

3 Record 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. 

4 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 get at least some of your money back. 

Warn the supplier 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're looking to cancel your mobile phone contract early, take a look at our guide.