With Christmas just around the corner, you may be paying off or buying presents using lay-by. But, what are your consumer rights if you want to cancel the purchase?
It doesn’t matter whether or not the business calls the purchase a ‘lay-by’, your rights under the Australian Consumer Law may still apply.
Say you want to purchase a new mountain bike, it is a lay-by agreement if you:
Any deposit you pay on the bike counts as an instalment.
In any of these scenarios, the bike retailer must provide you with a written lay-by agreement, which should specify all the terms and conditions, including any termination fee in plain language.
The deposits and instalments you pay are refundable if you cancel the lay-by.
However, be aware that you may incur a termination fee if you cancel (if the agreement provides that one is payable).
There is no set amount or percentage for a termination fee, but it shouldn’t be more than the businesses ‘reasonable costs’ to cover things like storage or administration costs.
Termination fees only apply if you cancel the lay-by. While it’s possible for a business to cancel a lay-by agreement in certain circumstances, they cannot charge you a termination fee and must refund all payments made.