The US government is suing Adobe for allegedly hiding expensive fees and making it difficult to cancel a subscription. In the complaint filed on Monday, the Department of Justice claims Adobe “has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms,” The Verge reported.
The lawsuit alleges Adobe “hides” the terms of its annual, paid monthly plan in the “fine print and behind optional textboxes and hyperlinks.: In doing so, the company failed to properly disclose the early termination fee incurred upon cancellation “that can amount to hundreds of dollars,” the complaint says.
When customers do attempt to cancel, the DOJ alleges that Adobe requires them to go through an “onerous and complicated” cancellation process that involves navigating through multiple webpages and pop-ups. It then allegedly “ambushes” customers with an early termination fee, which may discourage them from cancelling.
Customers encounter similar obstacles when attempting to cancel their subscriptions over the phone or via live chats, the DOJ alleges. The complaint claims “subscribers have had their calls or chats either dropped or disconnected and have had to re-explain their reason for calling when they re-connect.” The lawsuit alleges that these practices break federal laws designed to protect consumers.
The Federal Trade Commission posted:“FTC Takes Action Against Adobe and Executive for Hiding Fees, Preventing Consumers from Easily Cancelling Software Subscriptions”
The Federal Trade Commission is taking action against software maker Adobe and two of its executives, Maninder Sawhney and David Wadhwani, for deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions.
A federal court filed by the Department of Justice upon notification and referral from the FTC charges that Adobe pushed consumers toward the “annual paid monthly” subscription without adequately disclosing that cancelling the plan in the first year could cost hundreds of dollars. Wadhwani is the president of Adobe’s digital media business, and Sawhney is an Adobe vice president.
According to the complaint, when consumers purchase a subscription through the company’s website, Adobe pushes customers to its “annual paid monthly” subscription plan, pre-selecting it as a default. 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.
Adobe posted: “Adobe’s statement Regarding Federal Trade Commission Complaint”
“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.
In my opinion, if your company is being targeted by the FTC, it is because the FTC is aware that your company is not treating its customers well. Adobe needs to do better than that.
Adobe has been one of the leading legacy enterprise software companies to embrace generative AI and make it accessible to users through the likes of its proprietary (and enterprise-safe) Firefly AI image generational model, Generative Fill and other gen AI features in Photoshop, and, just today, an AI Assistant for its customer experience — plus much more, 