The Federal Trade Commission (FTC) has filed a lawsuit against Adobe and two of its executives, alleging that the software company hides early termination fees on its popular subscription services and makes it difficult for customers to cancel. The FTC claims that Adobe does not adequately disclose these fees, which can amount to 50% of the remaining payments for customers who cancel within their first year, potentially costing them hundreds of dollars.
According to the FTC, Adobe also creates obstacles for customers trying to cancel their subscriptions. Online cancellations require navigating through numerous pages, while phone cancellations often result in disconnections, repeated explanations to multiple representatives, and resistance and delay from those representatives.
Adobe shifted primarily to a subscription model for its products after 2012, with most of its revenue now coming from subscriptions. The company's general counsel and Chief Trust Officer, Dana Rao, stated that Adobe will challenge the FTC's claims in court. Rao emphasized that subscription services offer convenience, flexibility, and cost-effectiveness, allowing users to choose plans that suit their needs, timeline, and budget. He asserted that Adobe is transparent about its subscription terms and conditions and maintains a simple cancellation process to ensure a positive customer experience.
The FTC's Director of the Bureau of Consumer Protection, Samuel Levine, criticized Adobe for trapping customers into year-long subscriptions through hidden fees and cancellation hurdles. He highlighted the frustration felt by consumers when companies obscure terms during sign-up and create barriers to cancellation.
In response to the lawsuit, Adobe has defended its subscription model and commitment to customer satisfaction. The legal battle between Adobe and the FTC will determine the outcome of these allegations of deceptive practices in subscription services.