Everybody knows something about buyer's remorse, and most people have felt it from time to time. It is what happens when an individual buys something – usually something expensive – without giving the purchase sufficient consideration beforehand and then regrets the purchase immediately, or soon thereafter. Some states, including Colorado, have consumer protection laws allowing individuals with buyer's remorse to return a product or service.
In Colorado, buyers have the right to cancel certain types of purchase contracts if they act in a timely manner. The laws apply to purchases of repair credit contracts, time-share agreements, home solicitation or telemarketing contracts, and problematic new cars. Federal law adds to the cooling-off rule that protects buyers who impulsively snap up items sold in a location that is not the seller's permanent or primary place of business.
Canceling a Home Solicitation Sale
When sales people come knocking on the door to sell services or products, it's easy to agree to buy without giving the matter proper consideration. That's why these sales often cause buyer's remorse afterward. In Colorado, a buyer can act on that remorse to cancel their agreement. Under Colorado law, the buyer has the right to cancel any home solicitation sale as long as they act promptly. They have until midnight of the third business day after the day on which they signed on the dotted line.
How do Colorado residents go about cancelling the agreement? There are no special hoops to jump through. All the buyer has to do to cancel is to provide written notice to the seller that they intend to cancel the agreement. This should be sent to the seller at the address listed in the agreement or offer to purchase.
The cancellation notice doesn't have to use any special language or take a particular form as long as it indicates that the buyer doesn't intend to continue with the agreement. This notice is deemed delivered when in the seller's hands or, if mailed, at the moment that it is deposited in a mail box with proper postage.
Transactions that Cannot Be Canceled
But there are exceptions. A Colorado buyer may not cancel a home solicitation sale if they signed a separate statement describing an emergency that requires an immediate remedy to protect property or to protect the health, safety or welfare of a person. In this statement, the buyer must request that the seller provides goods or services immediately to safeguard the health, safety or welfare of individuals or to prevent damage to the buyer's property.
In order for the exception to prevent cancellation, the seller must have made a substantial beginning of performance of the contract before notice of cancellation. If goods are at issue, cancellation is not allowed if the buyer cannot return the goods to the seller in the same condition as they were received.
Credit Repair or Time-Share Agreement
Both credit repair companies and time-share companies provide products that are tempting to a consumer. What person with credit issues wouldn't like to repair their credit? And doesn't the idea of having the right to a few weeks in the sun in a favorite location sound like a good idea?
In fact, both of these products are so appealing that people tend to snap them up without looking at the small print or thinking over the cost. Colorado law gives them up to five days to cancel a contract with a credit repair company or a time-share agreement.
Colorado Lemon Laws for Car Purchases
Buying a new car is an expensive proposition, so if the purchaser immediately has problems with the motor vehicle, buyer remorse is a given. Lemon laws are not typical buyer remorse laws because the return is conditioned on problems with the vehicle. Essentially, Colorado state law provides that if a new vehicle has mechanical issues that cannot be fixed after numerous attempts, the purchaser has the right to return the car and get a replacement car or their money back.
What exactly triggers the protection of this law? To qualify for lemon law protection in Colorado, the vehicle must have been brand new when purchased. Unlike some states, like California, Colorado's lemon law applies only to new cars, not used cars. The car or truck in question must have had a defect that is difficult to fix. The dealership must have made four separate attempts to repair the vehicle in one year and the vehicle must have been under warranty on each of the four occasions.
Three-Day Cooling-Off Period
Some of the buyer's remorse laws that can help reverse impulsive buying decisions are federal rather than state. The federal laws apply in every state including Colorado. One to note is the Cooling-Off Rule, a law created by the Federal Trade Commission (FTC). This rule can help buyer's avoid remorse in certain situations, governed by the FTC.
The Federal Trade Commission describes the federal cooling-off rule as providing the consumer with three full days to rescind certain sales. They are then entitled to a full refund. The seller must, under the law, tell the buyer at the time of the sale about their right to cancel. The buyer must be given a copy of the sales contract, plus two copies of the cancellation form. The right to cancel lasts until midnight of the third business day after the sale.
What types of services or sales are protected under the FTC’s cooling-off rule? The sale, rental or lease of consumer goods and services that cost at least $25. In order for a purchase to qualify for return under this federal rule, the purchase must have been made at a location that is not the seller's permanent place of business nor their primary place of business. The coverage includes rentals, sales and leases made at trade shows, conventions and even at a customer's home.
- Justia:2020 Colorado Revised Statutes Title 5 - Consumer Credit Code Article 3. Regulation of Agreements and Practices Section 5-3-402.
- Phil Long.com: How to Return Used Cars to the Dealership
- Money Under 30: How to Use Buyer's Remorse Laws to Correct (Some of) Your Own Stupidity
- DMV.org: Dealer-Related Information in Colorado
- Find Law: Colorado Consumer Laws
- Cornell: Cooling Off Rule
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.