# Billing cycle and payment due date displayed before commitment

- **Pattern:** `ab-001401` (`finserv-disclosure.fee-rate.billing-terms`)
- **Severity:** high
- **Lifecycle:** active
- **Last modified:** 2026-04-18
- **Canonical URL:** https://auditbuffet.com/patterns/ab-001401
- **License:** CC-BY-4.0 — attribute to AuditBuffet Pattern Catalog (https://auditbuffet.com/patterns/ab-001401)

## Why it matters

The FTC Click-to-Cancel rule (effective 2024) requires that subscription terms — billing cycle, first charge date, renewal schedule — be disclosed clearly before the user submits payment. Reg Z (TILA) 12 CFR 1026.6(b) extends this requirement to open-end credit plans by mandating periodic payment disclosures. A checkout screen that shows only "$9.99/month" without specifying when the first charge fires or when it renews is not a billing disclosure — it is a price tag. Users who discover unexpected timing (e.g., charged immediately on free-trial signup) dispute the charge, generating chargebacks and triggering payment processor scrutiny.

## Severity rationale

High because incomplete billing disclosures violate FTC Click-to-Cancel regulations and Reg Z 12 CFR 1026.6(b), directly causing chargebacks and enabling regulatory action under Section 5 of the FTC Act.

## Remediation

Render all three required billing details on the checkout page — frequency, first charge timing, and renewal date — before the user submits payment. In `app/checkout/page.tsx`:

```tsx
// app/checkout/page.tsx
<div className="billing-disclosure">
  <strong>Billing Summary</strong>
  <ul>
    <li>Plan: Premium — $9.99/month</li>
    <li>First charge: Today upon confirmation</li>
    <li>Renewal: Monthly on the same calendar date</li>
    <li>Cancel anytime — no early termination fee</li>
  </ul>
</div>
```

Place this block above the payment form's submit button, not below it. For annual plans, also show the per-month equivalent and the exact annual charge amount.

## Detection

- **ID:** `billing-terms`
- **Severity:** `high`
- **What to look for:** Count all subscription or recurring billing products in the project. For each, check the checkout flow and product pages for disclosure of at least 3 billing details: (1) billing cycle frequency (monthly, quarterly, annual), (2) when the first charge occurs, and (3) when subsequent charges renew.
- **Pass criteria:** For each recurring product, at least 3 of the following billing details are clearly displayed before the user submits payment: billing cycle, first charge date, renewal date, and cancellation terms. The information appears on the checkout page or pricing page, not solely in the terms document. Report even on pass: "Found X of 3 required billing details for Y recurring products."
- **Fail criteria:** Fewer than 3 billing details are disclosed before commitment, or billing details only appear in fine print or the terms document, or any recurring product lacks a billing summary entirely.
- **Do NOT pass when:** The checkout page shows only a dollar amount (e.g., "$9.99/month") without specifying when the first charge occurs or when it renews — a bare price tag is not a billing disclosure.
- **Skip (N/A) when:** The project has no recurring billing or subscription products.
- **Detail on fail:** Specify which billing details are missing. Quote the checkout page file path. Example: `"Checkout page (app/checkout/page.tsx) shows monthly price ($9.99) but does not say when the first charge occurs or when monthly charges renew. Payment due date only appears in the Terms & Conditions."`
- **Remediation:** Add billing details to your checkout page in `app/checkout/page.tsx` or equivalent:

  ```tsx
  // app/checkout/page.tsx
  <div className="billing-disclosure">
    <p>
      <strong>Billing Summary</strong><br />
      Plan: Premium ($9.99/month)<br />
      First charge: Today<br />
      Renewal: Monthly on the same date<br />
      Cancel anytime — no early termination fee
    </p>
  </div>
  ```

## External references

- external ftc-click-to-cancel — https://www.ftc.gov/legal-library/browse/rules/negative-option-rule
- external reg-z-tila-1026-6b — https://www.ecfr.gov/current/title-12/chapter-X/part-1026/subpart-B/section-1026.6

Taxons: regulatory-conformance, content-integrity

HTML version: https://auditbuffet.com/patterns/ab-001401