FTC Files Complaint Against Adobe for Deceptive Cancellation Practices

The Federal Trade Commission has filed a complaint in U.S. 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 failing to provide a simple cancellation mechanism.

Defendants Sawhney, senior vice president of digital marketing and sales at Adobe, and Wadhwani, president of digital media business at Adobe, are accused of knowing about these violations while continuing the same illegal practices.

Tangled cancellation process

FTC says first violation of signup process occurs before a user even attempts to cancel because Adobe allegedly hid details of the “Annual Paid Monthly” (APM) subscription plan, including fees Early Termination Agreement (ETF).

“According to the complaint, when consumers purchase a subscription through the company’s website, Adobe pushes them toward its ‘annual pay monthly’ subscription plan, pre-selecting it by default,” a press release reads of the FTC.

“Adobe prominently displays the ‘monthly’ cost of the plan during sign-up, but it buries the Early Termination Fee (ETF) and its amount, which represents 50% of the remaining monthly payments when a consumer cancels mid-term. his first year.”

Information about Adobe’s ETFs is buried on the company’s website in small print or requires consumers to hover over small icons to find the information.

When attempting to cancel an Adobe subscription, the FTC says the process is complex and designed to discourage consumers from canceling their subscription. To make matters worse, the FTC claims that Adobe’s customer service deliberately prevented the attempts, resulting in continued billing.

First of all, customers need to locate the account management page, click on “Manage Plan” among various similar options like “Change Billing and Payment” and press the “Cancel Your Plan” button. However, this does not cancel their subscription.

Instead, they are forced to re-enter their password even if they are already logged in, and then they are taken to a mandatory feedback page to provide reasons for canceling. This page prominently displays the early termination fees in red font, almost as a deterrent.

If users attempt to cancel by contacting Adobe customer service, the FTC says calls and chats are often interrupted or disconnected, and consumers are transferred between multiple representatives who ask for all the information from the beginning.

The FTC received several reports from people alleging that despite the cancellation process, Adobe continued to charge them.

Requests for relief

The FTC’s complaint filed in the U.S. District Court for the Northern District of California asks the court to impose several forms of relief against Adobe and its two enforcements.

More specifically, the complaint asks:

• Permanent injunction to stop ongoing violations
• Civil monetary penalties for violations of ROSCA
• Fair monetary relief (restitution/refunds provided to consumers)
• Return of ill-gotten money
• Termination (cancellation) or reformation (modification) of existing contracts concluded by persons on misleading terms

Adobe recently came under fire for language in its terms of service, which indicated that customer content would be accessed to train AI or to perform security analysis.

This backlash led the company to change the terms of service language to better explain how the data would be used and confirm that it would not be used for AI.

BleepingComputer reached out to Adobe for a statement regarding the FTC’s action, but did not receive a response at the time of publication.