Sell your services distantly or door-to-door? Why you should always tell customers your cancellation terms
If you run your own business and sell distantly or door-to-door, it is important that you give consumers the information about cancelling purchases required by the Consumer Protection Act. If you don’t, there is a risk that the customer cancels their order when the work is done and doesn’t pay your bill.
Sanna Lempiäinen is a specialist at Suomen Yrittäjät, the Finnish SME association. She says that a ruling by an EU court reinforces the law that has already been in force for a few years.
Under the Consumer Protection Act, a consumer does not have to pay an invoice for work already done if, when selling distantly or door-to-door, the company did not correctly provide information to the consumer about their right to cancel the contract.
“In this case, a consumer could cancel the contract during the cancellation period even after the agreed service has been provided, and they wouldn’t have to pay the bill,” Sanna Lempiäinen of Suomen Yrittäjät says.
In general in distance and door-to-door selling, the cancellation period is 14 days, which begins when a service agreement is signed. However, the situation changes if the seller has not given the consumer information about their right to cancel. If the business selling the service fails to inform the consumer of the conditions, deadlines and procedures of their right to cancel, the cancellation period ends 12 months after the end of the normal cancellation period.
If the company corrects incorrect information, the cancellation period ends 14 days after the day the consumer receives the corrected information.
“Let’s say that during the cancellation period the business owner has begun providing the service, but the consumer hasn’t asked them to do so specifically, or the business hasn’t told the consumer that they will be charged for the service before it is cancelled. In that case, the consumer doesn’t have to pay for the service during the cancellation period,” Lempiäinen says.
Different rules in store
The right to cancellation comes directly from the Consumer Protection Act (Chapter 6, Section 14). The same Act also stipulates that a consumer does not have to pay for a service completed before it has been cancelled unless they have been provided with information on the right to cancellation (Chapter 6, Section 19).
In door-to-door sales, the information and cancellation form and instructions must be provided clearly and understandably on paper or, with the consumer’s consent, in another permanent way.
In distance sales, the information and cancellation form and instructions must be provided or made available to the consumer in a way suitable for remote communications clearly and understandably.
“It’s also important to note that the burden of proof that the information was provided always rests on the business owner,” Lempiäinen says.
Merely communicating the information orally is not enough.
An agreement made in a shop is not covered by the Consumer Protection Act’s regulations on distance and door-to-door selling. Purchases in shops do not as a rule come with a right to cancel.