Proposed framework for implementing a cooling-off period
Duration of cooling-off and refund periods and refund arrangements
Mr CHAN Chun-ying requested the Administration to clarify the actual “refund period” which would only last for seven-working-day or 14-calendar-day under the Administration’s proposal. In his opinion, such timeframe could only allow a trader to give refund instruction to the relevant bank for non-cash payment, while the actual duration for a bank to process the refund instruction would last for about two months depending on the situation.
PSCED(CIT) explained that the refund period would dovetail with the length of the cooling-off period, i.e. either a seven-working-day refund period for a three-working-day cooling-off period or a 14-calendar-day refund period for a seven-calendar-day cooling-off period. In making a refund, the trader would be required to use the same means as that used by the customer in effecting payment when the contract was concluded, unless the customer had expressly agreed otherwise. While making a cash refund would be relatively straightforward, refund using non-cash means often involved a number of factors that were outside the traders’ control. Therefore, it was proposed that for non-cash means, a refund would be regarded as having been made by traders at the time when traders gave an instruction on the refund to the relevant payment service providers.
Ancillary contracts and administrative fee
Mr CHAN Chun-ying noted that under the cooling-off framework, an ancillary contract entered into between the consumer and the trader or a third party arranged through the trader for the provision of goods or services that were related to the main contract would be automatically cancelled upon cancellation of the main contract. He asked about the detailed implementation of this aspect especially for cases involving payments settled by credit card installment payment plan (“IPP”), which would be ancillary contracts.
PSCED(CIT) replied that under the Administration’s proposal, any ancillary contract, including IPP contract, should be cancelled automatically when the main contract was cancelled within the cooling-off period. Operationally, a trader should cancel, or inform relevant third party to cancel, all related contracts upon being informed by a consumer of his/her decision to cancel the main contract.