FTC sues Adobe: Cancellation headaches and hidden fees alleged

The Federal Trade Commission (FTC) is suing software giant Adobe, alleging the company deceived consumers by hiding early termination fees (ETFs) and making it difficult to cancel subscriptions for popular software like Photoshop and Acrobat. The lawsuit names two Adobe executives, Maninder Sawhney and David Wadhwani, for their alleged roles in the practices.

The Charges: Deceptive Practices and Cancellation Hurdles

The FTC complaint, filed by the Department of Justice (DOJ), accuses Adobe of pushing customers towards its "annual paid monthly" subscription plan without clearly disclosing a significant ETF. This fee, according to the complaint, can be as high as 50% of the remaining monthly payments if a customer cancels within the first year.

The complaint further alleges that Adobe buries the ETF details in fine print or requires hovering over small icons on their website. This lack of transparency makes it difficult for consumers to understand the true cost of the subscription plan.

Consumer Complaints and Adobe's Response

The FTC's complaint highlights consumer reports to the agency and the Better Business Bureau (BBB) regarding the ETF. These reports suggest many consumers were unaware of the fee's existence or the year-long commitment associated with the "annual paid monthly" plan.

Despite these reports, the complaint alleges Adobe continued its practices of steering consumers towards the plan while obscuring the ETF details.

In response to the FTC lawsuit, Adobe released a statement on June 17th, 2024, maintaining they offer transparent terms and a simple cancellation process. They stated they would "refute the FTC's claims in court."

Cancellation Difficulties and The Restore Online Shoppers' Confidence Act

The FTC complaint goes beyond the lack of ETF transparency. It also accuses Adobe of employing tactics that make cancelling subscriptions difficult. These tactics, according to the complaint, include:

• Complex cancellation processes on the company website requiring navigation through numerous pages.
• Customer service representatives who resist or delay cancellations.
• Technical issues such as dropped calls and chats during cancellation attempts.
• Discrepancies where some consumers believed they had cancelled but continued to be charged.

The FTC alleges these practices violate the Restore Online Shoppers' Confidence Act, a law designed to protect consumers in online transactions.

The FTC lawsuit against Adobe highlights potential pitfalls for consumers in the age of software subscriptions. It underscores the importance of carefully reading subscription terms, including details on fees and cancellation policies. The case will be decided by the U.S. District Court for the Northern District of California.