Proactive Investors - Adobe Inc (NASDAQ:ADBE) has been sued by the Department of Justice and the Federal Trade Commission after it was accused of making it nearly impossible to cancel annual subscriptions mid-plan.
Users who sign up for one of the many software services offered by Adobe, which includes Photoshop and Premier Pro, have been hit with hidden fees and a labyrinthine customer service practice, the case argued.
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” Sam Levine, director at FTC Bureau of Consumer Protection said.
“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.”
According to the civil enforcement action launched against the software provider and its two executives Maninder Sawhney and David Wadhwani, Adobe used several practices to lock customers in, representing a direct violation of the Restore Online Shoppers’ Confidence Act.
Users who wished to exit contracts early were hit with a secret early termination fee which charges half of the remaining contract, sometimes worth hundreds of dollars.
Adobe would use fine print, optional text boxes and hyperlinks in an attempt to conceal the early termination fee, the lawsuit said.
“Some users who tried to cancel by contacting customer service would have their calls drop or disconnect and then have to re-explain everything all over again,” Linda Khan, FTC chair added.
“Others would be stuck in an endless loop of transfers across various Adobe representatives.