The four kinds of negative option
The FTC describes a negative option as any sales term or condition that lets a seller interpret a customer's silence, or failure to take an affirmative action, as acceptance of an offer. In a notice of March 2026 the FTC sorts the practice into four categories:
- Prenotification plans: the seller announces each shipment and sends it unless the customer declines
- Continuity plans: the customer agrees in advance to periodic deliveries until cancelling
- Automatic renewals: a subscription renews and is charged unless cancelled
- Free-to-pay conversions: a free or cheap trial becomes a paid plan unless cancelled
What the US rules say
For sales on the internet, the Restore Online Shoppers' Confidence Act (ROSCA) asks three things of a seller, as the FTC summarises them: clear and conspicuous disclosure of all material terms before billing information is taken, the consumer's express informed consent before any charge, and simple mechanisms to stop recurring charges.
The FTC's own Negative Option Rule, 16 CFR Part 425, covers only prenotification plans for the sale of goods. An amended rule of October 2024, known as click-to-cancel, was vacated by the Court of Appeals for the Eighth Circuit on 8 July 2025, and in March 2026 the FTC asked for public comment on new rules.
Why negative option billing matters in payments
Trial offers that convert on silence produce disputes: customers who did not expect the charge go to their bank. Acquirers and payment facilitators therefore look at trial terms, cancellation routes and dispute rates when underwriting a subscription merchant.
The term is American. EU and UK consumer law deal with subscription renewals under rules of their own, which this entry does not cover.
Negative option or recurring billing?
- Recurring billing
- Any automatic charging at intervals. Negative option is about how consent arises: from the customer doing nothing.
- Opt-in renewal
- The subscription ends unless the customer acts to continue: the opposite default.
Where Negative option billing shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- FTC, Negative Option Rule, 16 CFR Part 425 (rule page and history)
- FTC, Negative Option Rule: advance notice of proposed rulemaking, March 2026
General information, not legal advice: what applies to you depends on your services and your market.