New Law to Make It Easier to Cancel Deals and Purchases

The Knesset Finance Committee has authorized for its second and third reading a law that will make it easier for consumers to cancel business deals and purchases. The law, sponsored by MKs David Bitan (Likud) and Yoel Hasson (Labor) seeks to help consumers with getting out of disadvantageous business arrangements and purchases – a challenge oftentimes, despite consumer protection laws already on the books.

The law is specifically aimed at purchases of goods and services made online or on the phone. While the law states that such arrangements can be canceled within two weeks of being made, many people have found it difficult to do so, with companies demanding that consumers show up in person.

Under the new law, consumers will be able to cancel deals online, on the phone, by e-mail or by registered mail. Companies will be required to present consumers with several options that they can take advantage of.

Consumers will be able to cancel deals if they leave a message as well. If canceling by registered mail, the receipt issued when the letter is sent will constitute proof that the deal was canceled. Consumers can consider a deal canceled within three days of informing the company that the deal was canceled. Companies that fail to cancel deals will be fined between NIS 7,000 and 22,000. The law will apply to deals worth up to NIS 10,000.

MK Eitan Cabel, chairman of the Knesset Economics Committee, which authorized the bill for its second and third reading, said that there was a need for the law. “We all are familiar with the positive, VIP treatment that a customer gets when they enter into a business deal, how customers are treated like kings. But when they try to cancel the deal they are subject to a long list of troubles. Just as a customer is treated like a VIP when they enter a deal, they should be treated like one when they leave one.”