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New 14 day rule to cancel credit agreements

Consumer Credit Directive comes into force

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.

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