Adobe Sued By FTC Over Hidden Fees, Cancellation Issues
The FTC alleges Adobe makes it hard for customers to cancel subscriptions, resulting in early termination fees. Here's what you need to know.
The Federal Trade Commission (FTC) is taking action against Photoshop parent Adobe (ADBE) and two of its executives for allegedly hiding early termination fees and making it difficult for consumers to cancel their subscriptions.
Adobe pushed customers to subscribe to "annual paid monthly" plans without properly disclosing that they would be required to pay an early termination fee – which is 50% of the remaining monthly payments – if they cancel in their first year, the FTC said in its complaint.
In addition, the regulatory agency alleges that Adobe makes it very difficult to cancel subscriptions, including forcing consumers to navigate numerous pages to cancel online.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles," said Samuel Levine, director of the Federal Trade Commission's Bureau of Consumer Protection, in the press release. "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."
Adobe said it will refute the FTC's claims in court. "Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget," said Dana Rao, general counsel and chief trust oficer at Adobe, in a statement. "Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process."
Is Adobe stock a buy, sell or hold?
Adobe stock has been a solid choice for buy-and-hold investors, as evidenced by its impressive 20-year return. More recently, shares surged nearly 15% on June 14 thanks to an encouraging earnings report.
It's unsurprising then that Wall Street is upbeat toward the tech stock. According to S&P Global Market Intelligence, the average analyst target price for ADBE stock is $608.78, representing implied upside of nearly 17% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm CFRA Research is one of the more bullish outfits on ADBE stock with a Buy rating and $630 price target.
"It appears as if competitive concerns from open-source platforms are overblown as we see potential for growth rates to stabilize/improve on easier comparisons and more favorable pricing landscape in the coming quarters," CFRA Research analyst Angelo Zino said in a recent note. "We think ADBE is better positioned than most enterprise software companies to monetize AI across its ecosystem."
CFRA's $630 price target represents implied upside of roughly 20% to current levels.
Related Content
-
Stocks Climb Wall of Worry to Hit New Highs: Stock Market TodayThe Trump administration's threats to Fed independence and bank profitability did little to stop the bulls on Monday.
-
How Worried Should Investors Be About a Jerome Powell Investigation?The Justice Department served subpoenas on the Fed about a project to remodel the central bank's historic buildings.
-
Will Soaring Health Care Premiums Tank Your Early Retirement?If you're under 65 and want to retire soon, your plan may be derailed by skyrocketing ACA marketplace premiums. Here's what you can do.
-
Stocks Climb Wall of Worry to Hit New Highs: Stock Market Today
The Trump administration's threats to Fed independence and bank profitability did little to stop the bulls on Monday.
-
How Worried Should Investors Be About a Jerome Powell Investigation?
The Justice Department served subpoenas on the Fed about a project to remodel the central bank's historic buildings.
-
5 Golden Rules We (Re)learned in 2025 About InvestingSome investing rules are timeless, and 2025 provided plenty of evidence demonstrating why they're useful. Here's a reminder of what we (re)learned.
-
I'm a Financial Adviser: Here's How to Earn a Fistful of Interest on Your Cash in 2026 (Just Watch Out for the Taxes)Is your cash earning very little interest? With rates dropping below 4%, now is the time to lock in your cash strategy. Just watch out for the tax implications.
-
How Oil and Gas Investing Can Stabilize Returns and Shield Against Market Volatility: Tips From a Financial ProDirect exposure to oil and natural gas projects can strengthen a portfolio's long-term resilience with non-market-correlated cash flow and an inflation hedge.
-
How to Navigate the Silence After Your Business Sells for $5 Million: Tips From a Financial PlannerThe silence after a big sale can be disorienting. It's essential to redefine your identity and focus on your purpose before rushing into the next big thing.
-
Turning 59½: 5 Planning Moves Most Pre-Retirees OverlookAge 59½ isn't just when you can access your retirement savings tax-free. It also signals the start of retirement planning opportunities you shouldn't miss.
-
Are Your Retirement Numbers Not Looking Good? A Financial Adviser Runs Through Your OptionsIf you're worried about a shortfall between your income and expenses in retirement, you're not alone. But there are ways you can make up the difference.
