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SAN FRANCISCO — The US government on Monday sued software giant Adobe for allegedly hiding expensive fees and making it difficult to cancel a subscription.
In the complaint, the Department of Justice (DoJ) claimed that for years, Adobe “has harmed consumers by enrolling them in its default, most lucrative subscription plan without clearly disclosing important plan terms.”
The Federal Trade Commission (FTC) said in a statement that it 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 complaint filed by the Department of Justice claimed 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.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
“Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices,” Levine added.
According to the complaint, when consumers purchase a subscription through the company’s website, Adobe pushes consumers 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.
Despite being aware of consumers’ problems with the ETF, the company continues its practice of steering consumers to the annual paid monthly plan while obscuring the ETF, according to the complaint.
When consumers reach out to Adobe’s customer service to cancel, they encounter resistance and delay from Adobe representatives.
“Consumers also experience other obstacles, such as dropped calls and chats, and multiple transfers. Some consumers who thought they had successfully cancelled their subscription reported that the company continued to charge them until discovering the charges on their credit card statements,” said the FTC.
Adobe didn’t immediately comment on the DoJ lawsuit.