FTC targets Adobe for deceiving consumers about early termination fees

AppleInsider

The US Federal Trade Commission is taking action against creative software giant Adobe after alleging the company has employed deceptive pricing schemes to trap customers into subscriptions.

Adobe

In December, Adobe told investors on its quarterly financial call that the FTC believed Adobe had been violating the Restore Online Shoppers' Confidence Act. The company noted that it had been cooperating with the government agency since June 2022, and, at the time, believed that its practices complied with the law.

Now, a federal court complaint filed by the Department of Justice charges that Adobe had steered customers toward an "annual, paid monthly" subscription plan, without disclosing the hidden fees for canceling early.

When a customer decided they no longer needed or could not afford their Creative Cloud subscription, they would be charged 50% of the remaining subscription if they attempted to cancel.

Additionally, it was not always easy to figure out where or how one could cancel their subscription in the first place. To cancel, customers would often have to reach out to customer service.

Worse still, many customers were told their subscription had been canceled, only to discover that Adobe was still charging them.

The FTC has included a helpful blog to explain the situation, as well as offering suggestions for how to avoid predatory billing practices. It wisely suggests that before you sign up for any subscription, research others' experiences attempting to cancel the service.

It also suggests ensuring you make note of when a free trial ends so you can avoid a surprise bill.

In the event that you find yourself facing difficulty when it comes to canceling a subscription, the FTC directs consumers to dispute unauthorized credit charges with their debit or credit card company. Consumers are also encouraged to report the incidents at ReportFraud.ftc.gov.

The FTC has been pushing to make it easier for consumers to cancel subscriptions anywhere on the web, easing the burden on customers who may not wish to use a service anymore. This proposed "click to cancel" rule aims to make it as easy to cancel a subscription as it is to sign up for one.

Similarly, the FTC sued Amazon in June 2023 for tricking customers into signing up for Prime, only to make it exceedingly difficult to cancel those subscriptions when no longer wanted.

This is not the first time AppleInsider has discussed Adobe's predatory billing practices, either. In fact, we pointed it out in our piece that details the Adobe Creative Cloud pricing tiers.



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kierkegaarden

Apple seems to be the only company that makes it dead simple to cancel a subscription.  I don’t think they get enough credit for not pulling these shenanigans that many other companies do.

daalseth

Considering Adobe’s most recent behaviour I don’t think this will be the last FTC action against them. Adobe is the definition of Abusive Monopoly.

sflocal

I miss the days where my credit cards had the option to generate a temporary card number, for a set amount of money, with a user-specified expiration date.  I always used them with online purchases as I grew tired of dealing with companies that made it so difficult to cancel something.  

Somewhere in the annals of Adobe, there were a group of executives discussing how best to trick their customers into signing up for things they did not want.  They played the numbers game to bank that x-percentage of people will ignorantly continue to pay.  Really scummy for sure.

macxpress

Kierkegaarden said:

Apple seems to be the only company that makes it dead simple to cancel a subscription.  I don’t think they get enough credit for not pulling these shenanigans that many other companies do.

Apple gets no credit at all...they instead get sued for BS monopolistic practices which aren't even true in the first place. Governments should be looking at Apple as a definitive leader with things like this versus punishing them because they make big headlines on how much revenue and profits they make which makes no sense with them supposedly being a monopoly. 

I just miss the days where I could purchase a piece of software and not have to "rent" it with this subscription hanging over my head to keep using a product. Companies have gotten so greedy and these are the companies governments should be going after. 

edited June 2024

billthethrill

I am experiencing that very same frustration right at this moment. Despite repeated requests for cancellation made both by calling Adobe Customer Support and through emails sent to their dedicated Customer Support email address, my subscription is still active and the only response I have received is their SOP, which is to transfer me to another department and speak to someone else about my cancellation request. I have spoken to someone in THAT department twice now with the same result of total disregard to my specific instructions to cancel.

mikethemartian

I had a copy of Acrobat Pro that came free with a Fujitsu ScanSnap scanner that I really liked and used for about 10 years. Then when I upgraded to Catalina it no longer ran because it was 32 bit so I tried the subscription. What a pain it was. I’m not even talking about the price. They would just suddenly change the interface and you would be trying to do something the same way you had been doing it for a long time and realize you couldn’t anymore. There has been a thread on their user discussion forum for at least a year where people are just trying to get scroll bars back.

ailooped

BillTheThrill said:

I am experiencing that very same frustration right at this moment. Despite repeated requests for cancellation made both by calling Adobe Customer Support and through emails sent to their dedicated Customer Support email address, my subscription is still active and the only response I have received is their SOP, which is to transfer me to another department and speak to someone else about my cancellation request. I have spoken to someone in THAT department twice now with the same result of total disregard to my specific instructions to cancel.

I managed to cancel wout having to pay the full year by upgrading up a tier, which gave me the 14day trial period due to it being a new product… This was a couple years ago tho. Not sure if still works.

I got so pissed when I saw the 600$ cancellation fee… I was ready to burn the creditcard… But that solution was so satisfying… 

breq27

In some industries After Effects and Photoshop are basically a monopoly. Adobe wants to squeeze every penny from users regardless of the damage to its reputation or consumer well being. 

jeanpierredeelle

Adobe appears to employ more underhand tactics.
In some countries they have removed the restrictions on using customer work.
Also, it is still very complicated in some countries to stop automatically uploading your work and to delete documents that have already uploaded.   I wonder if Korean Kim has replaced the chairman.

ramanpfaff

I was heading off for a four month vacation the other day and tried to cancel my subscription for that time since I wouldn't be doing any photo work. I found out about the cancellation fee and wasn't happy, so just kept paying since other options cost more. Will be happy if Adobe loses this one. Just let people subscribe monthly and cancel when they want to. 

applezulu

Kierkegaarden said:

Apple seems to be the only company that makes it dead simple to cancel a subscription.  I don’t think they get enough credit for not pulling these shenanigans that many other companies do.

This is likely a cause of the attacks on Apple and their App Store. Some companies really want that revenue stream from inactive users. For them, it’s not just Apple taking their cut, but Apple empowering customers to cut them off with no chance to dissuade, intervene or obfuscate. 

tundraboy

Adobe doesn't seem to care at all about reputational damage from its two-bit sales practices.  No different than a small-time swindler.  Or that baby formula company in China that put melamine -which is toxic- in its product.

marvin

ramanpfaff said:

I was heading off for a four month vacation the other day and tried to cancel my subscription for that time since I wouldn't be doing any photo work. I found out about the cancellation fee and wasn't happy, so just kept paying since other options cost more. Will be happy if Adobe loses this one. Just let people subscribe monthly and cancel when they want to. 

People can already do this for most of the apps. There are 3 options: Monthly (cancel any time), Annual (paid monthly, cancellation fee, says it right on the button), Annual prepaid (paid yearly).

The people who are getting the fee are choosing the Annual paid monthly option to get the cheaper monthly rate and trying to cancel any time like the monthly option.

The plans that don't have a monthly option are low enough cost to not need one.

It makes sense for Adobe to have a lower early cancellation fee though. It should only need to be the difference between the monthly rate and the annual rate.

If someone is on the highest plan $60/m and it's $90/m for the monthly plan, the most anyone should be charged is the 12 month difference between the annual plan and monthly one: 12 x ($90 - $60) = $360 and for the low amount of cancellations they must get, they could probably reduce it to a flat rate like $99.

kmarei

macxpress said:

Kierkegaarden said:

Apple seems to be the only company that makes it dead simple to cancel a subscription.  I don’t think they get enough credit for not pulling these shenanigans that many other companies do.

Companies have gotten so greedy and these are the companies governments should be going after. 

Unfortunately this is the natural progression of capitalism.
if I'm the CEO of Adobe, it's not enough for me to be making 10-15% profit anymore.
i have to make 10,  then 15, then 20 etc
there is no way to meet those targets without this type of greed and basically screwing your end user
and getting every last dime out of them.
and adding fees and extra add-ons (looking at you doordash )
otherwise you're not getting your multi million dollar bonus.
and this will only get worse .

appleish

I'm not the kind of person who whines, and whines, and whines about their subscription rate. I think it's a good value for what you get and they frequently add new features to their applications as a bonus.

However, when it comes to hidden fees and predatory billing practices...

Slice and dice them, DOJ. Slice and dice every corporation that cheat their customers and dodge taxes.

netrox

It's not just Adobe. A lot of companies do that on purpose and it should be mandated that they must provide easy way to cancel online, if ordered online.