Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your area.
Trapped in a contract you want out of? The FTC's Cooling-Off Rule provides important protections for certain purchases. Whether it's a gym membership, timeshare, service contract, or subscription, knowing your cancellation rights can save you thousands. Many contracts have legal escape routes that companies don't advertise.
FTC Click-to-Cancel Rule: The FTC's new rule requires businesses to make cancellation as easy as sign-up. If you signed up online, you should be able to cancel online - no phone calls required.
Cooling-Off Periods
Federal Cooling-Off Rule
- Applies to door-to-door sales over $25
- 3 business days to cancel
- Full refund required
- Seller must provide cancellation form
- Send cancellation by midnight of third day
State Cooling-Off Laws
- Gym memberships: 3-5 days in most states
- Timeshares: 3-15 days depending on state
- Home repair contracts: Often 3 days
- Dating services: 3 days in many states
- Dance lessons: 3-7 days
Purchases NOT Covered
- Sales at seller's permanent place of business
- Sales under $25
- Real estate
- Insurance
- Securities
- Motor vehicles (at dealer)
Time Starts at Signing: Cooling-off periods usually begin when you sign, not when services start. Don't wait - if you're having second thoughts, act immediately.
Gym and Fitness Memberships
Legal Protections
- Many states limit contract length
- Cooling-off period to cancel
- Right to cancel for relocation
- Right to cancel for medical disability
- Limits on automatic renewals
Common Cancellation Rights
- Moving more than 25 miles away
- Medical condition preventing use
- Gym closes or moves
- Services significantly changed
- Death (for family)
Fighting Gym Contracts
- Review contract for cancellation terms
- Check state-specific gym laws
- Send cancellation in writing (certified mail)
- Document reason if required
- Dispute unauthorized charges
Subscription Services
Your Rights
- Clear disclosure of terms required
- Must be told of auto-renewal
- Easy cancellation method required
- Confirmation of cancellation required
Common Issues
- Hidden cancellation processes
- Required phone calls to cancel
- Charges after cancellation
- Free trial auto-converting to paid
- Difficult-to-find cancel button
Cancellation Tips
- Screenshot your cancellation confirmation
- Save cancellation emails
- Note date and time of cancellation
- Check for final billing cycle
- Monitor for unauthorized charges
Negative Option Marketing: Many states have laws against "negative option" practices where inaction equals agreement to charges. If you never agreed to something, you may be able to dispute charges.
Timeshares
Rescission Period
- Every state has mandatory cooling-off
- Typically 3-15 days after signing
- Must cancel in writing
- Send by certified mail
- Full refund required
After Rescission Period
- Check for misrepresentation
- Review for contract violations
- Consider resale (often at loss)
- Deed-back programs (if available)
- Attorney consultation for large purchases
Warning Signs of Scams
- Companies promising to cancel for upfront fee
- "Exit" companies with no guarantee
- Pressure to decide immediately
- Requests for payment by wire or gift card
Service Contracts
Types of Service Contracts
- Cell phone service
- Cable/internet service
- Security system monitoring
- Home warranty contracts
- Professional services
Early Termination Fees
- Check if fee was disclosed at sign-up
- Some states limit ETF amounts
- Often prorated based on time remaining
- May be waived if company breached
When You Can Cancel Without Penalty
- Service consistently fails to meet standards
- Company changes material terms
- Company raises prices mid-contract
- You move to area without service
- Military deployment (SCRA protections)
Keep Service Logs: If you're canceling due to poor service, document every outage, missed appointment, and quality issue. This evidence supports penalty-free cancellation.
Auto-Renewal Contracts
State Law Requirements
- Clear disclosure of auto-renewal terms
- Reminder notice before renewal (many states)
- Easy cancellation method
- Acknowledgment of terms
Fighting Unwanted Renewals
- Check if proper notice was given
- Review original agreement for terms
- Request proof of renewal consent
- Dispute charges with credit card
- File state AG complaint
How to Cancel Properly
Written Cancellation
- Always cancel in writing
- Send certified mail with return receipt
- Keep copy of cancellation letter
- Include account numbers
- State effective date
What to Include
- Your name and account information
- Clear statement of cancellation
- Effective date
- Request for confirmation
- Reference to any legal right being exercised
Follow-Up Steps
- Monitor for unauthorized charges
- Request written confirmation
- Keep records for 7 years
- Dispute any improper charges
Fighting Cancellation Fees
When Fees May Be Invalid
- Fee not clearly disclosed at sign-up
- Company breached agreement first
- Fee exceeds actual damages
- Service quality significantly declined
- Material terms changed
Negotiation Strategies
- Ask for fee waiver (be persistent)
- Cite long customer history
- Threaten public complaint
- Reference service issues
- Offer to settle for reduced amount
Legal Options
- State attorney general complaint
- FTC complaint
- Small claims court
- Credit card dispute
- Consumer financial protection bureau
Exercise Your Cancellation Rights
Generate a formal cancellation letter or demand for fee refund.
Create Your Letter