US sues Adobe for hiding SaaS fees

The US Federal Trade Commission is taking action against software maker Adobe and two of its executives for harming consumers by concealing hefty termination fees in its most popular subscription plan, and making it difficult to cancel subscriptions.

According to the complaint, Adobe calculates early termination fees as 50 percent of the remaining payments when consumers cancel in their first year.

The director of the FTC consumer protection bureau Samuel Levine said “Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles…Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel."

Dana Rao, Adobe's general counsel and chief trust officer, said the San Jose-based company will refute the FTC's claims in court.

The FTC accused Adobe of violating the Restore Online Shoppers’ Confidence Act, a 2010 federal law barring merchants from imposing charges, including for automatic subscription renewals, unless they clearly disclose material terms and obtain customers' informed consent.

The lawsuit seeks civil penalties, an injunction against further wrongdoing, and other remedies.

- CyberBeat