Quick Answer
For a nutraceutical merchant account, expect free-trial offers to be declined or heavily reserved through 2027, while full-price subscriptions with clear billing terms and easy cancellation should stay approvable.
The reason is the processor's own exposure. FTC Chair Lina Khan said in 2023 that the agency's proposal would "require that companies make it as easy to cancel a subscription as it is to sign up for one." That standard outlived the rule. I expect acquirers to apply it.
Key Points
- In September 2026, the FTC's settlement with Humboldt Merchant Services put $12 million and a permanent injunction on a payment processor, not a supplement seller.
- By attorney Steve Freeland's account, negative option billing appears in only one of the four merchant categories the order bars, and only alongside a mailbox-only address.
- The Eighth Circuit vacated the amended Negative Option Rule in July 2025, but ROSCA still requires clear disclosure, express informed consent and a simple way to stop recurring charges.
How a supplement offer bills matters more to an underwriter than what is in the bottle.
Can a supplement trial offer still get processing? Start with what regulators call it. Quarles described free to pay in 2021 as an offer where the buyer gets a product free or at a nominal price for an introductory period, then is charged unless they cancel before the trial ends.
That structure is what this forecast is about. Not supplements. Not subscriptions. Below, I walk through what the order covers, why the vacated federal rule changes less than sellers hope, and how to rebuild an offer an acquirer can approve.
In September 2026, the FTC's settlement with Humboldt Merchant Services put $12 million and a permanent injunction on a processor, not a seller. It was not the first. In June 2025, U.K.-based Paddle agreed to pay $5 million and was permanently banned from processing for tech-support telemarketers.
A legal alert on the FTC's March 11, 2026 rulemaking notice also lists Instacart's $60 million in refunds in 2025, over allegations that included free-trial sign-ups not being told a subscription would start automatically. Trial conversions are the target. Processors are now the lever.
For a supplement brand on recurring billing, that leaves one question: is your offer still bankable?
Why Was the Processor Held Responsible for Its Merchants' Offers?
Regulators treated the processor as the place where a deceptive offer becomes revenue, so opening and keeping accounts for those sellers became the processor's own violation.
Hold your own account up against the three things alleged:
- Every MID belongs to the people who actually run the business.
- Chargebacks stay inside card brand limits without moving volume between accounts.
- The application describes the offer as customers experience it.
The FTC alleged the processor opened MIDs for sellers it knew, or consciously avoided knowing, were operating through straw companies, with chargebacks at almost 10 times the excessive limits under card brand rules. The common assumption is that enforcement ends with the seller. It no longer does.
The trial format keeps producing these cases. In 2019, the FTC described trials advertised for shipping alone, typically $4.95, that billed as much as $98.71 and enrolled buyers in continuity plans without consent. In 2020, the agency reports, supplement marketer NutraClick LLC paid $1.04 million and was banned from negative option marketing.
Combining 4 sources points to one pattern: the conversion draws the order, not the supplement. A 2019 refund notice from the agency shows why regulators look upstream, because one health-product seller, Tarr, Inc., turned out to be three individuals operating through the 19 companies they controlled. Your acquirer carries that exposure now, and every provider of merchant payment processing solutions will read a nutra application through it. So didn't a court throw the federal rule out?
What Did the $12 Million Order Actually Put Off-Limits?
Many supplement sellers read the September 2026 settlement as a ban on free-trial processing. An attorney's reading of the order describes something narrower, and the difference decides which merchants should worry.
Steve Freeland, a payments attorney at Gordon Rees Scully Mansukhani, walked through the consent judgment in a video published September 24, 2026. By his account, the processor must pay $12 million, is permanently enjoined from credit card laundering, and is permanently barred from processing for "four categories of merchants."
| Merchant category the processor may no longer serve | Does negative option billing appear? |
|---|---|
| Straw companies, where the listed owners have no involvement in running the business | No |
| Merchants on the MATCH list | No |
| Merchants that have been subject to law enforcement action | No |
| E-commerce sellers whose sole physical address is a third-party mailbox, and that also bill on negative option or are new merchants with no processing history | Yes, but only alongside the mailbox-only address |
One of four. And even there, negative option billing is the second half of a two-part test. A supplement seller with a real address, a real owner and a clean record falls outside all four categories as Freeland describes them, whether the offer is a trial or a straight sale.
Freeland traces the case back to 2024, when the FTC pursued Legion Media, a group of merchants selling supplements on subscription. He says the agency then alleged that the processor opened merchant IDs for sellers it "knew or consciously avoided knowing" were operating through shell or straw companies, and kept accounts open with merchants running at "almost 10 times over the excessive limits for chargebacks under the card brand rules." A third allegation was improper load balancing: moving transactions onto a lower-risk bank identification number so chargebacks would look lower than they were.
Freeland does say all the processing at issue was subscription billing, auto-renewal and free-to-pay conversion, so the trial model was present in every account. The allegations themselves concern who owned the merchant, how high the chargebacks ran, and how volume was moved to hide them.
So which trial offers has the FTC gone after directly? In the Triangle Media case, filed in June 2018, the agency reproduced the seller's billing terms line by line.
How the Triangle Media trial billed
- At order: $4.95, which buyers took to be shipping and handling on a "risk free trial."
- Day 15: $84.71 for the trial product, unless the buyer phoned to cancel.
- Every 30 days after: $84.71 for another bottle, until cancelled.
- After checkout: a "Wait! Your Order is Not Complete!" page. Clicking COMPLETE CHECKOUT added a second auto-ship program at $79.31 a month in the FTC's example.
Terms as reproduced in the FTC's Business Blog, July 2018.
On desktop the terms sat at the very bottom of the payment page in what the FTC's Lesley Fair called "the tiniest of faint type on a white background." On a phone they were "buried behind a Terms & Conditions hyperlink." In May 2019 the sellers settled under orders carrying $48.1 million and $123.1 million judgments, both partially suspended.
Enforcement has outlasted the rulemaking around it. The Eighth Circuit vacated the FTC's Negative Option Rule in July 2025, the agency announced a fresh rulemaking notice on March 11, 2026, and the processor settlement arrived six months later.
A second pressure sits outside the FTC entirely, and here the sourcing is weaker. A broker who sells nutra processing wrote on a payments forum in October 2025 that Visa's acquirer monitoring program now folds fraud and disputes into one ratio, with a limit "around 1.5% now, and tightening to below 1% next year," and that acquirers are fined when their portfolio breaks it. An investor commentator used the same 1.5% figure in September 2026 for a subscription company on a Visa list. Neither cites a Visa document, so treat the thresholds as practitioner reports.
The same post's advice list tells merchants to "hide nothing" on trial billing, then recommends spreading volume across multiple merchant IDs to "reduce risk exposure." Moving volume to keep chargebacks artificially under the limits is the conduct Freeland says the order now forbids.
Across the order, the seller cases and the card-network reports, the same three things recur: hidden owners, buried billing terms, and dispute levels far above what the card brands allow. A trial or a subscription, by itself, appears on none of those lists. Our own underwriting team describes its work in another vertical the same way: a processor prices how the money moves, and the product label matters far less.
- Compare your own setup against the four categories: does the listed owner run the business, are you on the MATCH list, has law enforcement acted against you, and is a third-party mailbox your only physical address?
- If you bill on negative option from a mailbox-only address, ask any prospective processor how it treats that combination.
- Open your checkout on a desktop and a phone and confirm the day-15 price and the recurring charge sit above the card field, in readable type, with no hyperlink in the way.
- Ask your acquirer which combined fraud and dispute ratio it holds you to, and track that figure weekly.
- If anyone proposes splitting your volume across several merchant IDs, ask what the purpose is.
How we checked this
We relied on a payments attorney's video summary of the consent order, two FTC publications on the Triangle Media case, a law firm note on the 2026 rulemaking, a broker's forum post and an investor video. We did not read the order itself, so its terms reach us through one attorney's account. The Visa thresholds come from a broker who sells nutra processing and from an investor commentator, and neither cites Visa. The underwriting view is ours, taken from a team note about a different vertical. We board subscription and high-risk merchants, so a narrow reading of the order suits us. Still unknown: how acquirers other than the one bound by the order will treat trial offers.
- Steve Freeland, Gordon Rees Scully Mansukhani, video summary of the processor consent order, September 24, 2026.
- FTC Business Blog, Lesley Fair, recap of the Triangle Media complaint, July 3, 2018, updated December 2, 2025.
- FTC, press release on the Triangle and Hardwire orders, May 31, 2019.
- hlc.com, note on the March 2026 rulemaking notice, undated.
- r/PaymentProcessing, broker's post on Visa monitoring rules, October 7, 2025. The author solicits processing business in the post.
- Mikele X10 Stocks, investor video on a subscription dispute, September 26, 2026.
- Seamless Chex underwriting team note, relayed September 4, 2026.
Are Free-Trial Offers Legal Again Now That the Federal Rule Was Vacated?
Yes, a free-trial offer can still be lawful, but the vacated rule changed little: ROSCA and the FTC Act still apply, and acquirers now enforce their own reading of both.
The Eighth Circuit vacated the amended Negative Option Rule in July 2025. What fell was the 2024 version, which would have opened civil penalties of up to $51,744. The statute stayed. ROSCA still bars an online negative-option charge unless the seller does three things:
- Discloses all material terms clearly before collecting billing information.
- Gets express informed consent before any charge.
- Provides a simple way to stop recurring charges.
Quarles wrote in a 2021 publication that ROSCA is the primary federal statute governing these plans, and that FTC staff sort them into four types, with automatic renewal and free-to-pay listed separately. That separation matters. Recurring billing is not the barred act.
Nor is a replacement rule close. A legal alert on the FTC's new advance notice says it reached the Federal Register on March 13, 2026, with comments due April 13, 2026, and that the surviving rule does not reach free-to-paid trial programs at all. I read the vacatur as a change of gatekeeper, not a green light. For a brand running high-volume credit card processing, the reviewer who counts is now the acquirer's risk team, and that team decides offer by offer.
What Is the Best Merchant Account for Nutraceuticals on Recurring Billing?
The best merchant account for nutraceuticals is one whose underwriter has already approved your billing shape, because processors price how an offer charges the buyer, not the product on the label.
Our analysis of a different product category came down to one qualifying question, and it carries over to supplements: does this processor already board offers built like yours? A merchant who applies under a tidy retail label has misdescribed the business.
Ask a prospective processor how often it re-reviews an approved account and what would trigger a fresh look at your checkout and cancellation path. Ask, too, what proof it wants at each review, such as dated records of buyer consent and of how fast cancellations were processed. Before you apply, rebuild the offer so an underwriter can read it in one pass:
- Price the first order in full, and state the recurring amount and schedule before billing details are taken.
- Make cancelling as easy as signing up.
- Disclose every entity and MID behind the offer.
A vendor selling nutra accounts argued in 2025 that card network monitoring would push acquirers to drop risky merchants faster. Treat that as a pitch, not a finding. An account approved on a vague description is the one I'd expect to see frozen or closed first.
If an earlier termination already put your business on the MATCH list, MATCH list merchant account approval starts with the same question: how exactly do you bill?
How Do Nutra Merchants Avoid Frozen Funds and Sudden Terminations?
The best protection against frozen funds and sudden terminations is an offer your acquirer has seen in full, plus reserve, trailing-chargeback and termination terms you read before signing.
That is where I expect the pressure to land through 2027. A $12 million order against one processor is a message every risk team has read.
Goodwin's February 2026 client alert said companies with recurring billing "must reassess user flows, disclosure practices, and cancellation mechanisms now." I'd add the merchant agreement to that list.
Three developments would soften this forecast:
- A court ruling that narrows processor liability for merchant conduct.
- An FTC decision to drop the rulemaking it restarted in 2026.
- A final rule with clear compliance terms.
I'm not counting on any of them. Until one arrives, the trial conversion is the part of your offer to rebuild first.
Frequently Asked Questions
What Else Do Nutra Merchants Ask About Free-Trial Processing?
Most follow-up questions come down to three things: what a negative option is, whether a trial can still be approved, and how fast a new account can open.
What is a negative option offer?
A negative option is an arrangement where a customer's silence or failure to act is treated as agreement to be charged. A free trial that converts into a paid subscription is one form of it.
Can a nutra free-trial offer still get a merchant account?
Some can. I expect more declines and heavier reserves for trial conversions, though no public figure puts a number on either. A full-price subscription with clear terms is the safer application.
How quickly can SeamlessChex onboard a supplement business?
SeamlessChex offers credit card processing with same-day onboarding and no contracts, including for subscription and high-risk businesses other processors turn away. Start through the contact page at seamlesschex.com/contact.
Written by
Lily Flanigan
Operations Manager, SeamlessChex
Lily Flanigan is Operations Manager at SeamlessChex, a credit card processing and fintech payments platform recognized on the Inc. 5000, where she focuses on operations and process optimization.
Connect on LinkedInSeamlessChex works with established businesses processing a minimum of $25,000 per month.