What the 3-Day Cooling-off Rule Is -- And Isn’t

The Federal Trade Commission just amended its “Cooling-Off Rule." What is it?

— -- The Federal Trade Commission just amended its “Cooling-Off Rule,” which reminds me that most people have no idea what the old rule was, let alone how it stands now. To understand the Cooling-Off Rule, you have to go back in time and picture helpless housewives struggling to fend off oily door-to-door salesmen. Think “Mad Men” era. In fact, the AMC show featured just such a scene in its “Indian Summer” episode.

But I digress. This longstanding rule gives consumers three days to cancel a purchase —but not just any purchase. The Cooling-Off Rule only applies to purchases made away from the seller’s permanent location. It was enacted to protect consumers from the aforementioned door-to-door salesmen and when making other purchases at your home or office or at conference rooms, convention centers, and other places a seller might rent.

You are probably asking yourself, why is Leamy obsessing over this obscure rule in the impersonal Internet age? The only person who comes to my door these days is the UPS guy delivering my latest Amazon Prime One-Click purchase! She’s wasting our time!

I’m not. The Cooling-Off rule matters for what it does NOT do, more than what it does. Now hear this: The three-day Cooling-off rule does NOT apply to car purchases! This is the most prevalent and prevailing consumer myth of all time. People think you can buy a car, drive it around for three days and then waltz back to the dealership and return it. WRONG! Car sales are final. Once you sign on the dotted line, the car is yours. Period.

Unless… the dealer sold you the car from a temporary location like an auto show, which would count as one of the FTC’s temporary locations. (There are also a few enlightened dealerships that allow customers a few days to return a vehicle. They have CHOSEN to do that. They are not REQUIRED to and could change their minds at any moment.)

As for how the Cooling-Off Rule has changed, that’s not nearly as important. The rule now says that if you make a purchase of $25 or more at your residence, you have three days to cancel. And that if you make a purchase of $130 or more at some other temporary location —like the trade show scenario— you have three days to cancel. They upped the dollar amount for the latter. That’s it.

That’s all the three-day Cooling-Off Rule is. And all that they changed.

Of course, if you would like more detailed information about the scintillating Cooling-Off Rule, you can get it from the consumer watchdog’s mouth here. (Caution that the preceding article still uses the old dollar amounts.) And for more on how (little) it has changed, read here.

Opinions expressed in this column are solely those of the author.