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Status: You are viewing the version of the handbook as on 2009-03-31.

ELM 1.4A 1Distance contracts: cancellation

Right to cancel

ELM 1.4A.1R

Aconsumer2 has a right to cancel a distance contract the making or performance of which by the firm constitutes, or is part of, issuing e-money unless:

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  1. (1)

    the performance of the distance contract has been fully completed by both parties at the customer's express request before the customer exercises his right to cancel; or

  2. (2)

    the firm has an initial service agreement with the consumer2 and the contract is in relation to a successive operation or separate operation of the same nature under that agreement (see 2COBS 15 Annex 1 1.11R), in which case the right to cancel applies only to the initial agreement.2

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Cancellation period

ELM 1.4A.2R

The right to cancel referred to in ELM 1.4A.1 R starts on the later of:

  1. (1)

    the day of the conclusion of the contract; and

  2. (2)

    the day on which theconsumer2 receives the contractual terms and conditions and other information required by ELM 6.8 (Information),2 and lasts for 14 calendar days.

    2

Failure to give information on cancellation rights

ELM 1.4A.3R

If a firm does not give a consumer2 notice of his cancellation rights in accordance with ELM 6.8.2A R and COBS 15.2.4 G2, the contract remains cancellable and the consumer is not liable for any shortfall.2

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Exercising the right to cancel

ELM 1.4A.4R

A consumer2 may, without giving any reason, cancel the contract by serving notice upon the firm, before expiry of the relevant cancellation period, in accordance with the instructions for exercising that right provided to the consumer2 in accordance with ELM 6.8.2A R and COBS 15.3.1 R and COBS 15.3.2 R2.

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ELM 1.4A.5R

The following rules also apply as if issuing e-money were accepting deposits:COBS 15.3.4 R (Record keeping), COBS 15.3.1 R (Notice of exercise) and COBS 15.42 (Effects of cancellation).

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