The US Department of Justice and the Federal Trade Commission (FTC) sued the company on the grounds that Adobe imposed a hidden cancellation fee on users who wanted to cancel their subscriptions. Adobe has been accused of forcing a complex and difficult cancellation process to deter users from canceling unwanted subscriptions.
US government sued Adobe over hidden cancellation fee!
Adobe offers Creative Cloud products on a subscription basis and fees are paid monthly. However, this monthly payment does not mean that you can cancel whenever you want. Most customers are essentially locked into a confidential annual contract.
Customers are enrolled in an annual Creative Cloud plan by default after signing up for a free trial. Adobe users who want to cancel the annual contract have to pay a hidden fee corresponding to 50 percent of the remaining contract liability.
Adobe offers customers a cancelable monthly subscription plan that costs more, but this difference isn’t always made clear to new or existing customers. Adobe’s website lists a $60 monthly fee for access to all its apps, but that’s only if you agree to the annual contract.
A true monthly plan is cancelable, has a $90 monthly fee, and if you pay a year upfront, there’s no refund if you cancel after the 14-day period.
According to the Department of Justice, Adobe’s regulation violates the Restore Online Shoppers’ Confidence Act (ROSCA). It allegedly hides confidential fee information through fine print and hard-to-spot links.
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The complaint states that for years, Adobe profited from this hidden fee, misleading consumers about the true cost of subscriptions and using it as a powerful customer retention tool by imposing the fee on them when they tried to cancel.
Adobe also allegedly failed to provide consumers with a simple mechanism to cancel their online subscriptions. Instead, it is alleged that in order to preserve subscription revenue, Adobe subjects its subscribers to a complex and inefficient cancellation process filled with unnecessary steps, delays, unsolicited offers, and warnings when trying to cancel.
The lawsuit seeks unspecified amounts of consumer damages, monetary penalties, and a permanent injunction that would prevent Adobe from continuing to use hidden fees to deter customer cancellations.