Cooling off period: is cancelling a service as straightforward as it should be?

Some insurers are using confusing language that could see some customers miss out on a refund they're legally entitled to.

If you’ve changed your mind about a product or service, you'll probably know that there's often a 14-day cooling off period to ensure you can get your money back.

But it appears not all firms are as clear as they could be about how customers can get a refund and, in some cases, this could lead to someone mistakenly thinking they'd missed the deadline.

How soon do you need to cancel?

I recently spoke to a person who asked to cancel an insurance policy soon after purchasing as they'd noticed they'd made an error on the cover dates. 

The insurer, Coverwise, responded to the request after a couple of days and stated they had to provide certain additional information that they'd not initially been asked for to cancel the policy.

Interestingly, the insurer claimed these details had to be provided within the 14-day cooling off window in order to get their refund.

As it turned out they were able to meet the deadline, but what would have happened if a customer had initially asked to cancel after, say, 13 days?

Given it took two days for the company to respond to the initial cancellation with a request of their own, would they then have missed out?

I asked Martyn James, head of media and marketing at Resolver, whether the request for more info to be handed over within two weeks was in the spirit of the law regarding the cooling off period.

“I'd argue that we have the right to make a decision on a policy within 14 days once we've got the final offer,” he said.

“If that changes due to the firm not asking the right questions from the start, then I believe the person should be given more time or not face a charge for cancellation.”

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What exactly happened?

The policyholder had a travel insurance product with Coverwise and changed their mind but was disappointed to find out additional information was required.

Without this information, the product wouldn’t be cancelled. 

It then added that "this information must be provided to us within 14 days of receipt of your original policy documentation (via email) to enable us to action your request."

This request for additional info was not made clear in the initial contract the policyholder took out, which claimed:

“If you find that this policy does not meet your needs, please contact us in writing within 14 days of receipt of your purchase.

“Your premium will be refunded as long as you have not travelled and do not intend to make a claim.”

As we mentioned earlier, given that Coverwise took two days to respond to the policyholder’s request, they may have assumed they'd missed the opportunity to get their money back had they cancelled towards the end of the cooling off period.

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How did Coverwise respond?

I contacted Coverwise to find out more about their cancellation policy.

They clarified that a full refund would be made – even if extra information was required after the cooling off period – if the policy had not been used and there were no known or pending claims.

So was their wording clear enough to avoid customers mistakenly thinking they had missed out if they received the belated response for more info after the 14-day window had closed?

“Although our policyholders haven’t previously considered this clause to be problematic, we will discuss changing this text with AXA (who as the insurer must approve all changes to the policy wording) at the next policy wording review to see if a clearer statement can be included,” the spokesperson told me.

As Coverwise said its T&Cs were similar to InsureandGo and CoverForYou, I decided to contact them to check what you would need to do to cancel a product.

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What did the other providers say?

CoverForYou said it would offer a full refund as long as the request was 'valid' and received within the 14-day timeframe.

If someone was struggling to find all the information within the cooling off period but already notified them that they wanted to cancel, a spokesperson confirmed the insurer would offer more time for them to find the details.

A refund can be requested over the phone, email or webchat and the customer must have their policy number, email address, postcode and date of birth to check if they’re insured.

As for InsureandGo, customers just need to call, email or use webchat to start processing the refund, but the company would need to check they haven't travelled.

The customer would need to provide their name, date of birth, address, email address and mobile number.

Any valid refund requests will be honoured (even if extra information is needed) as long as the customer notified InsureandGo of their intention to cancel during the cooling off period.

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What is a cooling off period?

The cooling-off period starts from the day after you confirm a contract (either in writing or verbally) or receive the documents.

In some cases, you don’t get a cooling off period, including for accommodation, courier services, vehicle rental services and for catering/leisure activities for specific dates.

You also don’t get a cooling-off period if you went to the premises of the business to arrange the service.

If some services were provided during this time period, the company may keep some of your money to cover the costs.

Refund processes need to be clearer

While Coverwise offers to process a refund even if extra information was required outside of the 14-day cooling off period, it’s concerning this was not clear in the fine print of the policy discussed above.

It might sound like a trivial matter, but I think there is a real possibility a customer would think they'd missed the chance of a full refund if they'd received that response after the 14-day window and simply not bother following up.

The lesson here is, as always, to know your rights and to not be put off by confusing communications.

What do you think? Is the cooling off explanation clear enough in the example above? Have you encountered any examples of confusing, or even misleading, cooling off notices? Let us know in the comments section below.

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