Why is this important?
What happens to a credit agreement if you cancel your distance sales order?
When you buy goods or services on the internet, by telephone, mail order or teletext (distance sale) you have the right to cancel your contract. If you took out a credit agreement to pay for the goods or services, you need to find out if you can also cancel the credit agreement.
This page tells you about cancelling a credit agreement when you cancel a contract made by distance sale and what to do next.
Who is the credit agreement with?
When you cancel an order for goods or services bought on credit, what happens to your credit agreement depends on whether you got the credit from:
- the trader who sold you the goods or services, for example in-store credit sale, or
- a separate credit provider. For example, if you paid on a credit card or with a loan from your bank.
If the credit was provided through the trader
When you cancel the order you'll send a letter to the trader to cancel your order – or contract – this also has the effect of cancelling any related credit agreement for the goods or services.
The trader must inform the creditor that notice of cancellation has been given.
If you have received any money from the creditor, you have to repay it. If you pay it off within one month you won’t have to pay any interest.
If the credit provider is separate from the trader
If you’ve taken out a credit agreement to buy the goods from a provider that is not linked to the trader you bought the goods from, you may have a right to withdraw from the credit agreement under the Consumer Credit Act.
Ending a credit agreement under the Consumer Credit Act.