How to Cancel Those Gym, Cell Phone, and Other Fixed-Term Contracts
Terminating a fixed-term contract is a skill that all consumers must learn over time, usually once they realize how difficult it is to terminate a cell phone or gym contract.
Before the advent of the Consumer Protection Act, consumers fought to get by without handing over the last of their savings.
The section of the Consumer Protection Act (LPC) dealing with fixed-term contracts was specifically included because consumers have complained a lot about this issue.
Fixed-term contracts are valid for a certain period of time and generally apply to cell phones, gyms, satellite monitoring of your car and security services.
Article 14 and regulation 5 of the CPA determine the maximum duration of these contracts and the way in which you must proceed to terminate them.
The duration of fixed-term contracts
According to Regulation 5, companies are not allowed to offer fixed-term contracts longer than 24 months unless you agree and the company can demonstrate that it will be financially beneficial to you.
The company must also inform you that you will be charged a cancellation fee if you wish to cancel before the contract expires.
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Can a fixed-term contract be terminated?
Article 14 determines that you can cancel a fixed-term contract when it expires and that the supplier cannot charge you for this, except for the last amount you still owe.
The service provider must also notify you in writing 40 to 80 days before the expiration of the contract that the contract will expire and indicate whether the current price will be changed if you renew the contract. 2
You can also continue the contract on a monthly basis depending on significant changes such as price.
You can terminate a fixed-term contract before it expires, but you will have to pay for it.
According to Section 14, you can give the service provider 20 days notice that you wish to cancel.
The service provider must then calculate the amount you owe for the goods or services provided up to the time of cancellation. If you have already paid for the full term, the service provider must reimburse you for the part that you will not use.
If you entered into a fixed-term contract after someone called you in the context of direct marketing and you did not call first to inquire, you have five working days to terminate the contract by writing without paying a penalty.
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How much do you pay to cancel?
According to Article 14, the service provider must calculate the amount taking into account:
- The amount you still owe until the termination date
- The value of the transaction until the cancellation
- The value of items that will remain in your possession, such as a cell phone
- The value of the goods returned to the supplier
- The duration of the agreement initially agreed
- Your losses or benefits as a result of entering into the agreement
- The nature of the goods or services
- The length of the termination notice you provide
- The reasonable possibility for the supplier to find another consumer with whom to conclude an agreement between the moment of receipt of the cancellation and the moment of the cancellation, while acting diligently
- The general practice of the relevant industry.
The service provider is therefore not authorized to oblige you to pay the full amount for the remaining months and not to charge cancellation fees that would prevent you from canceling.
Is the service provider authorized to terminate the contract?
Service providers usually cancel your contract if you don’t meet your obligations in the contract, such as paying your account on time each month.
The service provider must inform you if the contract will be canceled and can then cancel it within 20 days if you do not pay the amount in arrears or if you do not comply with the other conditions of the contract.
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The fine print
Fine print is not allowed in any consumer contract. This includes cancellation terms, as well as unfair contract terms, such as waiving your CPA rights.
When is Article 14 not applicable?
Article 14 is not applicable to agreements between companies or between individuals.
Agreements between you and your bank, franchise agreements and fixed-term investments are also excluded.