FTC Lawsuit Accuses Adobe Of Trapping Customers And Hiding Fees

Man running Photoshop on an iMac display.
Adobe finds itself in hot water with the United States Federal Trade Commission (FTC) over its handling of subscription plans for software services like Photoshop. In a federal lawsuit that's been in the process of being filed for months, the FTC alleges that Adobe pushes towards its annual paid monthly subscription plans, but does not adequately disclose early termination fees that are associated with the longer-term subscription option, among other gripes.

"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."

How it works is, users can sign up for various tiers of software subscriptions and either pay upfront for a yearlong subscription, or have it broken up into monthly payments, the latter of which the FTC says is predominantly shown.

Screenshot of Adobe's Photography plan.

One of the main issues the FTC alleges is that Adobe "buries the early termination fee and its amount, which is 50 percent of the remaining monthly payments" if a customer decides to cancel in their first year. This can amount to hundreds of dollars, depending on the specific plan.

"In addition to failing to disclose the ETF to consumers when they subscribe, the complaint also alleges that Adobe uses the ETF to ambush consumers to deter them from cancelling their subscriptions. The complaint also alleges that Adobe’s cancellation processes are designed to make cancellation difficult for consumers," the FTC says.

According to the FTC, cancelling a subscription with Adobe requires navigating multiple pages. The FTC also alleges that if a customer reaches out to Adobe's customer's service to cancel a subscription, they are met with "resistance and delay" tactics, including 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," the FTC states in a blog post.

The lawsuit (PDF) also alleges annoyances such as having to reenter passwords when clicking "Cancel your plan" even if the subscriber was already signed into their account, and dealing with pop-ups and offers designed for retention. And finally, the FTC points to consumer complaints filed with the Better Business Bureau, where Adobe currently has a 1.03/5-star rating from customer reviews, with many of the complaints centered on the cancellation process.