- tech360.tv
US Government Files Lawsuit Against Adobe for Concealing Fees and Making Cancellations Difficult
The US government has filed a lawsuit against Adobe, accusing them of concealing termination fees and making it difficult for customers to terminate subscriptions. Adobe allegedly hides prices and crucial terms in the fine print of their membership plan. Early termination fees are calculated as 50% of the remaining payments for customers who cancel within the first year.
The Federal Trade Commission (FTC) filed a complaint in the federal court in San Jose, California, accusing Adobe of burying important terms and termination fees in the fine print of its "annual paid monthly" subscription plan. These fees, which can total hundreds of dollars, are frequently hidden beneath textboxes and hyperlinks, making them difficult for customers to detect.
According to the complaint, if customers terminate their subscriptions within the first year, Adobe charges early termination costs of 50% of the remaining payments. The FTC also says that Adobe creates unreasonable barriers for users who want to cancel online, requiring them to wade through multiple pages. Those attempting to cancel by phone frequently experience disconnections, repeated explanations to different agents, and resistance and delays.
The lawsuit also names two Adobe executives, David Wadhwani, the president of the digital media business, and Maninder Sawhney, a senior vice president in digital sales, as defendants.
Samuel Levine, director of the FTC consumer protection bureau, stated, "Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles. Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel."
In response to the case, Adobe's general counsel and chief trust officer, Dana Rao, said that the business will take the FTC's accusations to court. Rao underlined that Adobe's subscription agreements include clear terms and conditions and a simple cancelling mechanism.
Adobe's subscription services have been a substantial source of income, accounting for $4.92 billion, or 95% of the company's $5.18 billion in sales for the fiscal quarter ending March 1.
The FTC claims that Adobe's actions violate the Restore Online Shoppers' Confidence Act, a 2010 federal statute that prohibits merchants from charging fees, including automatic subscription renewals, without properly disclosing material terms and gaining customers' informed consent.
The action seeks monetary penalties, an injunction to stop future violations, and other reasonable remedies.
The US government has filed a lawsuit against Adobe, accusing the company of hiding termination fees and making it difficult for customers to cancel subscriptions.
Adobe allegedly conceals fees and important terms in the fine print of its subscription plan.
Early termination fees are calculated as 50% of the remaining payments for customers who cancel within the first year.
Source: REUTERS