FTC Sues Adobe For Hiding Cancellation Fees and Confusing Customers

The United States Federal Trade Commission (FTC) is going after Adobe for an alleged violation of the Restore Online Shoppers’ Confidence Act, or ROSCA. According to the lawsuit announced Monday, Adobe intentionally made it difficult for customers to cancel their subscriptions by burying the termination path and driving people toward confusingly-worded annual plans. The FTC also claims Adobe used hidden cancellation fees to scare customers out of canceling their subscriptions, which make up a large portion of the company’s revenue.

Enacted nearly 15 years ago, ROSCA aims to protect consumers from recurring charges that they haven’t knowingly and explicitly consented to paying. While auto-enroll and Amazon’s sketchy Prime tactics might immediately come to mind, the FTC argues that Adobe violated ROSCA by pushing customers toward a “yearly billed monthly” subscription while obfuscating the plan’s hefty early termination fees. The yearly billed monthly plan appears at first to be a better deal than the regular monthly plan, but if customers try to cancel their subscription before their year is up, they’re hit with a fee that amounts to 50% of their remaining monthly payments. Any information about the early termination fee is hidden in small print or tiny hover icons on Adobe’s website. 

Information about the “yearly billed monthly” plan’s early termination fee is hidden behind the tiny information icon, which you must hover over to read.
Credit: Adobe

The FTC also claims that Adobe’s subscription termination processes “are designed to make cancellation difficult for customers.” Instead of offering a streamlined path toward cancellation, Adobe allegedly forces customers to navigate several web pages, making the process confusing. Calling customer service doesn’t help, as Adobe’s representatives repeatedly use “resistance and delay” to complicate cancellation.

“Consumers also experience other obstacles, such as dropped calls and chats, and multiple transfers,” an FTC release reads. “Some consumers who thought they had successfully canceled their subscription reported that the company continued to charge them until discovering the charges on their credit card statements.”

Two Adobe executives, vibe president Maninder Sawhney and digital media president David Wadhwani, are also implicated in the suit. Though the FTC doesn’t say specifically what role Sawhney and Wadhwani might have had in Adobe’s ROSCA-violating practices, Wadhwani is involved in Adobe’s creative applications, like Photoshop and Lightroom—two of the main drivers behind Adobe subscriptions—while Sawhney is responsible for digital sales. Both arms of the company were allegedly aware of customers’ issues with Adobe’s early termination fee, despite continuing to employ and obscure the fee.