Also known as a Cancellation Period, under the terms of the Consumer Credit Act, this is the period of time in which the customer has the right to reconsider a credit agreement (loan or credit card offer) and refuse in writing the agreement on offer for any reason and without obligation and without incurring a fee or penalty. If the customer chooses to waive this entitlement, the agreement takes effect immediately. A cooling off period of 10 days is applied after the loan agreement has been signed. This is mainly to protect consumers from salesmen selling loans using high pressure techniques, where a loan may be agreed and signed when it is not in the interests of the borrower to do so.
Similarly, there is a 14-day period in the case of investments and insurances. However, there are exceptions, such as in the case of life insurance and individual pensions where a cooling off period of 30 days is assigned. Cooling off periods apply only to some investments. There is no such period for services such as share purchases where the price depends on fluctuations in the market.
