Watch out for negative option billing

You might think this was outlawed in Canada after Rogers Cable tried to get customers to pay for new specialty TV channels in 1995, unless they said they didn’t want them. There was a huge uproar and Rogers backed down.

In fact, the federal government never passed a law to get rid of this marketing practice. So, federally-regulated banks and telecom firms can sign you up for products and services you didn’t ask for and keep billing you for them.

Are you still paying for credit card balance insurance or telephone calling features that were supposed to be free for a few months? If you don’t say no, you’re on the hook. The onus is on you to opt out.

The Ontario government did pass a law in August 2005 to outlaw negative option billing, but it applies only to contracts signed after that date. Suppose you have a long-standing furnace protection plan or fixed-price natural gas plan. Unless you take specific action to get out when the contract expires, the company will roll it over for another year.

Health and fitness clubs may also indulge in this practice. They insist that you pay with automatic debits from a credit card or bank account, so they can keep deducting your payments long after your contract is up.

Pay attention to your bills and don’t let marketers “opt you in” by your inaction.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

36 thoughts on “Watch out for negative option billing”

  1. Cedar Springs Health & Racquet Club, Burlington, ON, is using negative option billing. I signed a 12 month contract February 2006 which I did not renew. They sent renewal forms November 2006 and now claim that I was automatically renewed for 12 months because I did not respond within 60 days. I have cancelled my membership effective April 30th and they are claiming I must pay until Feb 2008.

    Would the Ontario change you mentioned in 2005 not permit this?

    thank you,
    Donna Jewell

  2. This is a regular practice of fitness clubs! Been there – done that.

    If they are taking the money out of your account – close your account now! That’s the only way to stop them. (The bank will not enforce the stop payment order or the fitness club changes the dollar amount by a few dollars or cents and it goes through, without the bank catching it – and you cannot get your money back from them!!!)

    If the payment is on a credit card – call the card company and say your card was lost or stolen! Then, write a letter to the Ministry of Consumer Relations detailing who you talked to and what happened. (They have an entire department that deals with health clubs – does that tell you something!!)

    The worst they are going to do is send the balance to a collection agency (again been there – done that). Sure, it will affect your credit rating for a few years. BUT almost everybody I dealt with about money understood that fitness clubs regularly rip people off and they discounted this negative comment on my credit rating.

    Put up with the collection agency harrassment and don’t pay the money. It’s stressful at first – but you know you are in the right and after a while you will feel quite proud of yourself for not letting them away with it.

    PLEASE NOTE: most fitness clubs will continue to bill you for the following year, even though you have signed a one-year contract. They will verbally say that they don’t – but then they go ahead and bill you anyway – so if you are signing up for one year, get the fitness club to write in ink on the contract that they will not roll the contract into a second year and get the club manager to sign it. Most will still bill you for the second year’s membership without your permission – but at least you have something in writing to use in fighting back!

  3. Wintel Communications, a long distance provider (part of the Primus group, I think), sent us a letter a while ago stating that the service would now involve a monthly network charge. Before, it had always been free (that is, pay as you go with no monthly fee).

    They apparently stated that if we did not reply to the letter, we would automatically be billed for this charge. We never agreed to pay this charge and I am outraged by it. Is this legal in Canada?

  4. Men’s Health uses negative option billing for a Total Fitness Guide they send out. You are required to send them confirmation that you are not interested in their “risk-free” magazine within 14 days. If you do not, they send the magazine and you have 21 days to send the magazine back to them or they charge three payments of $13. Absolutely ridiculous. The language in the letter is extremely sneaky.

  5. I signed up for a three-month reduced-rate trial with Weight Watchers online, with the understanding that the payment would stop once the three months had passed.

    They sent me an email welcoming me. I just glanced at it. Buried in that email was a note that said once the three months passed, they would automatically renew me at the full online monthly rate unless I cancelled.

    It turns out that my Visa and my husband’s Visa charges come in on the same bill. He pays it and never asks me to check it –big mistake. I didn’t notice that I was still paying Weight Watchers until recently – six months after my three-month trial had expired.

    I’ve emailed them asking for a refund, but I’m not hopeful. I was able to cancel immediately once I was aware I was still paying, but I am not happy they used negative option marketing and got an extra six months out of me.

    Lesson is this: Check your bills carefully.

  6. Reliance Home Comfort is doing this too, we called for information but they sent a letter saying we were signed up and then when i called I was told I had to cancel in writing, i refused since i did not sign anything, also the letter they sent did not say it had ordered and I had to cancel it. i just noticed it said an invoice was to be sent. When I called they said whenver you ask for information they sign you up automatically

  7. Sears Canada recently sold their credit card operations to the Chase Group in the US. We recently received a Sears Mastercard to replace our Sears card.

    Then, we received a negative billing option insurance policy that (if not cancelled within 30 days) puts you on the hook for credit card health insurance. Beware.

  8. In 2007, I entered into an agreement with Dr. Green to take care my lawn in that summer.

    In last April, their team came to do my lawn without my written approval and billed me for that visit. When I called their customer service department to investigate, they claimed that the agreement will automatically renewal unless I called to cancel in advance. They refused to void their first visit invoice.

    I’ll bring up the case to Ontario Ministry of Government and Consumer Services.

  9. I had a negative option billing experience for a cable service here in Victoria BC a few years ago. Now I got an unsolicited offer from CIBC for automatically switching my Aerogold Visa card to a new Infinite card using the same marketing ploy (negative option billing).

    I wonder whether CIBC is doing the same for Ontario residents.

  10. What about the practice by cable companies of removing channels or as they say (“migration of certain channels from Analogue Pack to Digital”) you subscribe to, but still charging you the same fee??? As far as I am concerned, this is illegal and unethical!!!……..It follows along the same line as the “negative option billing” a number of years ago.

    I have been told by the cable company that there is nothing they can do!!! And the CRTC seems to take no interest in this issue.

  11. I contracted Dr. Green last year to service my lawn. They called in March to renew and I informed them I was not interested. They said I had to call the office directly as they were only telemarketers. I called and left a message at the office.

    Two weeks later, they showed up and I told him I had cancelled. He said no problem and it was probably a mistake. I was away for 6 weeks and during this time they came back and gave me their “very best” 1st and 2nd treatment.

    My lawn was being done by another company, whose services I had paid for, so my lawn was fertilized 4 times in 2 months. I called Dr. Green and they said I was still responsible to pay $115. THey have informed me that the bill would be sent to collections.

    Since I do not have a signed agreement from 2007 (I just called and gave them my credit card number), I am wondering what legal basis they have to insist on payment?

  12. Seems Dr. Green has been doing this a lot.

    I too have problems with them coming back for a second year on a one-year contract without me asking for the second year.

  13. I am currently in a dispute with Rogers about the negative billing for phone services I haven’t used since December 2007. I just had a call from them wanting to discuss my overdue bill. I told them to forget it. I know they won’t, but I am more than happy to take them as far as it will go.

    If you are doing any business with Rogers, you should consider dumping them.

  14. Hi Ellen, I have just realised that uses a negative option billing practice for their “three month Gold membership” available for $15.

    When you sign up, somewhere in the terms and conditions it is buried that “for your convenience” this will be extended and charged every three months ad infinitum.

    Stupidly, I had not noticed these quarterly charges (now CAD $19.90), but when I got a new credit card I realised this for a charge put through in October.

    I called in Renton, Washington (on hold for probably more than 15 minutes, so paying LD charge) and the Classmates rep said that they could cancel but that there were no refunds for any previous charges.

    I agreed that I was liable for the initial 3 months (probably agreed to a year or so ago), but I asked that the October charge be refunded.

    She would not do this until I explained that I would discuss with CIBC Visa about how this seems to be a negative option billing scam.

    She then passed me on to a supervisor who credited me the last payment after I said that I would dispute all payments (except the first ‘Gold Membership” offer which was good for 3 months and to which I agreed) and they could come to small claims court here to settle. At this point she refunded my $15. I asked her to take me right off the site.

    Thought you should be aware, keep the consumer informed …they say they have 3,000,000 members. At $15 every three months, that is quite a sum.

    Cheers and thx for listening.

  15. Bell Canada has sent an email to me stating that my account is being upgraded including a $5 charge for security software I have not downloaded, used or want. Emails states you must tell them you don’t want it or they will keep billing. After calling twice I now have an email with a confirmation number to stop the charges. They didn’t offer to rebate what had already been charged.

  16. We received from CIBC coverage for credit card payment protection plan we never requested.Charge $89 a month for $10,000 coverage!!! This is ten times the normal premium for the amount covered!

    CIBC would not cancel it. So we had to spend all time and money to cancel with the insurance company. Negative option billing should be outlawed.

  17. Bell TV does Negative Billing
    Bell TV’s tactic is for Major League Baseball Extra Innings. I received a letter today which indicated that I would automatically be provided with this service because I subscribed last year and if I didn’t call to cancel by April 5, 2009 I would be charged $159. It goes on to say that there are “No Refunds”.
    The problems with this tactic are:
    • People may not receive the letter
    • People are away or sick and can’t response as demanded
    • Even if a person phones the call centre may not correctly make the correct computer update
    • The company’s computer might screw up.
    • Waste of a person’s time trying to contact the correct person to get the process completed.

  18. Just received a “Balance Protector” Plan for my Visa card which is going to be added unless I phone and Cancel. I can’t believe the banks are having such a hard time of things that they have to resort to this kind of crap.

  19. I’m presently fighting Bell TV’s negative option billing for MLB extra innings. They are charging me $120 for this year’s package without my authorization or request.

    My first contact with customer service in May resulted in an apology and their consent to a future credit for the first installment charge.

    Yesterday, I was surprised to find that my new bill has a second installment charge instead of a credit!

    A second call to their customer service resulted in their claim never to have consented to a credit, only a cancellation of the package.

    The package was withdrawn from my channels, but I am told to pay for the entire season of MLB anyway. Now that is nerve! Oh and “have a great day” of course.

  20. The city of Toronto practices its own form of negative billing.

    When forced into the garbage bin program, Torontonians were told to select a small, medium or large garbage bin. The small bin was the only one which gives the homeowner a small rebate, instead of a charge on the utility bill.

    The majority of people selected the SMALL garbage bin because they were NOT stupid. But the city scrapped these orders without any notification and shipped out MEDIUM and LARGE garbage bins INSTEAD, because they are not HONEST.

    There are NO markings on the bin saying “small”, “medium” or “large”, and having never seen the new garbage bins before, no one had a clue that the city had intentionally duped them into extra charges until the first garbage bin charges appeared on the city utility billings.

    We fought like the dickens and eventually a supervisor at the “water and waste” department agreed to REMOVE ALL CHARGES for the large bins that we did NOT order, credit the amount on the next bill and switch the bin to the SMALL size.

    We got the SMALL bin, but also STILL got charged for the MEDIUM garbage bin on the next billing, PLUS a late charge of $6.43, because we had gone past their “due date.”

    It took many days arguing with idiots and playing phone tag to finally reach the “supervisor,” who ultimately lied to us and charged us for the MEDIUM garbage bins instead of rebating us the full charge (after telling us otherwise).

    It turns out that the city only had a small supply of SMALL garbage bins and ran out of them very quickly. Secretly cancelling our orders for rebate-able SMALL bins and substituting them with orders for chargeable MEDIUM and LARGE bins was felt to be the best course of action, since it cost them nothing and would force Torontonians to pay extra charges. It fits into Miller’s plans of gouging Torontonians in any way possible.

    So, if you wondered why negative billing is not being aggressively stamped out, it’s because our own local govenment is using the same technique to rip off it’s taxpayers. They won’t kill a cash cow.

  21. Received a charge to my Mastercard of $59.00 U.S. Apparently, one must cancel before the renewal date (which is not provided by

    I had taken it out once and now every year they are going to renew. Seems the only way to stop them is to cancel the Mastercard.

    Bank of Montreal Mastercard is not at all helpful in this matter.

  22. For those who had negative option billing from Dr. Green, cay you tell me how did you resolve the issue other than giving in to their demand?

  23. Dr Green is harassing me now for the service I never asked for. Seem standard practice for them. Maybe it’s time to take Dr. Green to the court and pay all of us for harassment? Any goodwill lawyers out there? 🙂

    I suggest to be stubborn and not to pay them. Maybe it will force them to stop practice nobody likes.

  24. Wow! I wish I had seen this website with all the issues with Dr. Green Services Inc. (3120 Wharton Way, Mississauga) before I let them do lawn service to my property last year.

    This company phoned me about twice a week – Spring 2009 – asking if they could send me a quote. The quote came and when they phoned again, I said I would like to think about it.

    Then a week or so later, a guy rings the doorbell and hands me a bill for $53 saying he has just fertilized my lawn.

    This should have been my first clue to problems to come, but when I phoned Dr. Green’s office, they said this $53 would be counted as the first visit if I paid $298 for 5 fertilizer applications plus lawn aeration plus grub treatment plus crabgrass control plus pH testing.

    Yeah right! I got 4 fertilizer applications with documents left in my door. They said they did pH testing, but I saw no results.

    I did NOT get grub control or crab grass control and when I phoned the office to ask why, I was told it is now illegal for them to apply it!

    So where is my refund? Better yet, why are they still advertising this as a service on their website?

    Oh, and they claim they came in October for the 5th visit, but I saw no one and had nothing left in my door.

    April 13, 2010 – I find a bill in my door from Dr. Green for $53 saying they have applied fertilizer. We had been out of town and did not get the message to say they were coming. The back gate was locked, so only the front lawn was done.

    When I phoned Dr. Green’s office to tell them I had not ordered their service this year, I was told it was up to me to cancel or they will keep coming – and this is written on every bill. So it is – in very small print!

    I have NOT paid this bill and I’m up to 2 months’ interest charges. I figure I will post this story on as many websites as possible and as many Better Business Bureau sites as possible.

    However, I see I am not the first as there are 194 complaints on the BBB website for Dr. Green Services with a D- rating.

    – unscrupulous telemarketing practices
    – poor and incomplete service
    – offering crabgrass and grub control that they cannot apply
    – negative option billing

    This company needs to clean up its act!

  25. CIBC is applying its “payment protector” automatically at a huge charge per month, with no verbal or written authorization.

    I do not think I am alone here, but I would believe this to be a fraudulent charge by any practical definition. We just saw this charge today and called CIBC Visa with no help.

    I will be calling the insurance company tomorrow to have the charges reversed. The next call I will be making is to the Better Business Bureau to ensure they are aware of this negative option billing scam that CIBC’s senior vice president Rick Lancaster authorized.

    I suggest others do the same or this theft by large Banks will continue.

  26. Travis, I am dealing with the same issue with CIBC and it has been such a pain. They have charged me $700 for something I never signed up for. I am so frustated because they do not want to refund the money.

    The insurance company has indicated that they would not refund so I am dealing directly with my branch now.

    I am wondering how is that in Canada things like this are allowed to happen. There is no protection to consumers. It is such a shame.

    I will keep you posted on how my situation develops.

  27. Related, but not exactly negative billing, is Air Canada’s double dipping policy of not giving refunds on seats if you have to cancel a reservation, even after they resell the same seat to someone else.

    They will not even let you keep the seat that you have been forced to pay for empty, preferring to take the money from both you and the new, unsuspecting customer.

    It seems that this policy of “double billing” for seats should be illegal, but it apparently isn’t. What’s with that?

  28. Negative Option Billing Alive and Well:

    Cogeco states in a recent letter that they are increasing their Download Speed from 3 Mbps to 4 Mbps. They are also increasing the Maximum GB from 10 to 15.

    They go on to say, “In order to continue to bring you the best Internet Service, we will be adjusting the monthly rates of your High Speed Internet service. The cost of your High Speed Internet package will change from $30.95 per month to $32.95 per month” (effective 1 Oct. 2011).

    When you try to decline their generous offer, Louise St. Pierre, Senior Vice President of Residential Services says: “Take it or Leave it.”

  29. Well, they should have passed the law because Rogers is at it again. This time they are telling consumers in residential apartments that if bulk TV feed of Rogers is discontinued – for example with the changeover to digital tv or if a landlord chooses to do so, THEY WILL CONTINUE BILLING THE VIEWER DIRECTLY. (this is September 2011) and they do not give the viewer a choice of discontinuing cable.

    Is this what consumer protection is coming to in Canada? The federal government and the CRTC should be taking another look at this.

    It is underhanded and sneaky.

  30. I ordered a free trial of Rejuveneye max and Derma-Juvenate. Now I think I might be trapped into a negative billing problem. Can anyone help?

  31. Just received a bill from Reliance Home Comfort. I took possession of my house 5 weeks ago and had no dealings with Reliance prior to receiving this bill.

    Tried to discuss this over the phone, but I got a very convoluted response from the sales person. Finally, I told them to scratch me from their database.

    NOT IMPRESSED. A lot of immigrants, old folks, may be taken in by such a scam.

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