FTC files complaint against Adobe for deceptive cancellation practices

Post updated to add Adobe's statement

The Federal Trade Commission has filed a complaint in US federal court against Adobe and two executives, Maninder Sawhney and David Wadhwani, for deceptive practices related to their subscription plans.

The allegations against the software giant and its executives include violations of the Restore Online Shoppers' Confidence Act (ROSCA) by failing to clearly disclose material terms and not providing a simple cancellation mechanism.

Defendants Sawhney, Senior Vice President of Digital Go To Market & Sales at Adobe, and Wadhwani, President of Digital Media Business at Adobe, are accused of knowing about these violations yet continuing the same unlawful practices.

Entangled cancellation process

FTC says the first violation in the enrollment process occurs even before a user attempts cancellation, as Adobe allegedly hides the details of the "Annual Paid Monthly" (APM) subscription plan, including the early termination fee (ETF).

"According to the complaint, when consumers purchase a subscription through the company's website, Adobe pushes consumers to its "annual paid monthly" subscription plan, pre-selecting it as a default," reads a press statement from the FTC.

"Adobe prominently shows the plan's "monthly" cost during enrollment, but it buries the early termination fee (ETF) and its amount, which is 50 percent of the remaining monthly payments when a consumer cancels in their first year."

Adobe's ETF disclosures are buried on the company's website in small print or require consumers to hover over small icons to find the disclosures."

When attempting to cancel an Adobe subscription, the FTC says the process is complex and designed to deter consumers from canceling their subscriptions. To make matters worse, FTC claims that Adobe's customer service purposely impeded attempts, leading to continued billing.

First, customers need to locate the account management page, click on "Manage plan" among various similar options such as "Edit billing and payment," and press the "Cancel your plan" button. However, this does not cancel their subscription.

Instead, they're forced to re-enter their password even if they're already signed in, and then they're directed to a mandatory feedback page to provide reasons for their cancellation. That page prominently displays the early termination fee in red font, almost as a deterrence.

If the users attempt to cancel by contacting Adobe's customer service, the FTC claims calls and chats are often dropped or disconnected, and consumers are transferred between multiple representatives that request all info from the beginning.

FTC has received multiple reports of people alleging that despite going through the cancellation process, Adobe continued to charge them.

Requests for relief

The complaint filed by the FTC at the U.S. District Court of the Northern District of California asks the court to impose several forms of relief against Adobe and its two executes.

Specifically, the complaint requests:

• Permanent injunction to stop ongoing violations
• Monetary civil penalties for ROSCA violations
• Equitable monetary relief (restitution/refunds issued to consumers)
• Disgorgement of ill-gotten money
• Rescission (cancellation) or reformation (modification) of existing contracts people entered under deceptive terms

Adobe has recently come under fire for language in its terms of use, which indicated that customer content would be accessed to train AI or to conduct security scans.

This backlash led the company to change the language in the TOS to explain better how data would be used and to confirm it would not be used for AI.

BleepingComputer has reached out to Adobe for a statement regarding the FTC's action but has not received a response by publication time.

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Adobe published the following statement disputing FTC's allegations.

“Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget.

Our priority is to always ensure our customers have a positive experience.

We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process.

We will refute the FTC’s claims in court.” - Dana Rao, General Counsel and Chief Trust Officer