Compliance · Glossary
Also called: negative option, automatic renewal billing
Negative option billing is a billing arrangement where the customer's silence or inaction is treated as consent to recurring charges, as in automatic renewals and trial offers that convert to paid subscriptions. It is regulated federally by ROSCA and FTC Act Section 5 and by state automatic renewal laws such as California's ARL.
Negative option billingsits inside the broader system of U.S. payment processing economics that determine a merchant’s effective rate. Most operators encounter this term on their merchant statement without understanding what it controls, which is how the four hidden fees covered by our methodology slip past unnoticed.