Cancellation Policies – Are They Legal?

Cancellation Policies – Are They Legal?

Cancellation policies are business policies that govern how a customer may cancel a service. Businesses usually have a policy that protects them from being out of pocket if a customer wants to cancel. Whether or not a business charges a cancellation fee is discretionary.

When are cancellation policies legal?

The Australian Consumer Law, and the Office of Fair Trading, state that it is legal for a business to have a cancellation policy as long as:

  • The terms and conditions are set out on the website of the business.
  • Clients are informed of the process in which they are to cancel an appointment and within what time period.
  • Clients are informed of the applicable fee(s) that they will be charged if they don’t cancel within the stated time.

Clients should be reminded of the policy if the business confirms its appointments via phone or email. If the business does not confirm appointments via phone or email, it could put an acknowledgement clause when they are booking so that clients are aware of the policy.

When are cancellation policies not legal?

There are some circumstances where cancellation policies would be against the unfair contract laws and a businesses would not be entitled to charge a cancellation fee, such as:

  • When extenuating circumstances are out of your control and you are literally unable to attend your appointment despite trying, and the business attempts to charge you for a full appointment.
  • If a business gave you no notice regarding a cancellation fee and charges your credit card without giving you time to dispute the charge.

If a business charges you a cancellation fee without displaying or informing you that they have a cancellation policy, then it is usually considered an unauthorised transaction and you are entitled to request a refund for the amount paid.
How much can a business charge?

A business can only charge an amount that is proportionate to the amount that would be lost by the customer cancelling an appointment.

A business who seeks to make a profit out of cancellation fees will be in breach of the Australian Consumer Law.

Can my doctor and dentist charge cancellation fees?

The short answer is yes.

Yes, they run a health care service but they are also businesses who provide a service to the community and are given payment for their services, so they are entitled to charge a cancellation fee to their clients who do not attend scheduled appointments.

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