Say “Cooling-Off Rule” and most people (OK, most people over a certain age) think of the classic door-to-door salesman — although the scope of the Rule is broader than that. After listening to comments about the future of the Cooling-Off Rule, the FTC has decided to keep it in place, but is asking for your feedback about one important proposed change.
When the Cooling-Off Rule was enacted in 1972, the FTC was concerned about a host of questionable practices, including high-pressure sales tactics and “deceptive door openers.” (In one famous pre-Rule case, encyclopedia salesmen quite literally got their foot in the door by claiming to be conducting “educational surveys.”) Under the Rule, door-to-door sales people selling goods or services that cost $25 or more generally have to make certain oral and written disclosures about the buyer’s right to cancel the contract within three business days.
But the Rule has always covered more than just people peddling stuff in your living room. The definition of “door-to-door sales” includes many sales, leases, or rentals of consumer goods or services made at a place other than the seller’s place of business. Sure, that covers the buyer’s home, but it also includes facilities rented on a short-term basis — like hotel rooms, convention centers, fairgrounds, dorm lounges, or the buyer’s workplace.
As part of its ongoing review of rules and guides, the FTC considered the comments it received about the effectiveness of the Cooling-Off Rule and concluded that it still offers important protections for consumers without imposing undue burdens on businesses. But let’s face it: $25 doesn’t buy what it used to. So the FTC is proposing to up the minimum threshold to $130, whether under single or multiple contracts.
The deadline for filing comments is March 4, 2013. Save a step by filing online.