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
-
My Retirement Learning Curve, 1 Year InA retiree checks in with what they wish they knew early on and what they've changed about their plan one year in.
-
Introducing Your CD's Edgier Cousin: The Market-Linked CDTraditional CDs are a safe option for savers, but they don't always beat inflation. Should you try their counterparts, market-linked CDs, for better returns?
-
'Humbug!' Say Consumers, Despite Hot GDP: Stock Market Today"The stock market is not the economy," they say, but both things are up. Yet one survey says people are still feeling down in the middle of this complex season.
-
Introducing Your CD's Edgier Cousin: The Market-Linked CD
Traditional CDs are a safe option for savers, but they don't always beat inflation. Should you try their counterparts, market-linked CDs, for better returns?
-
'Humbug!' Say Consumers, Despite Hot GDP: Stock Market Today
"The stock market is not the economy," they say, but both things are up. Yet one survey says people are still feeling down in the middle of this complex season.
-
The SEC Is Concerned for Older Investors and Retirement Savers. Here's What You Should Know.The SEC focusing on older investors, retirement and college savers, and private securities. Here's how those changes impact you.
-
Why You Should Pay Attention to Company GuidanceUnderstanding how corporate profit forecasts affect analysts’ estimates and stock ratings can help you make investment decisions.
-
How to Protect Yourself and Others From a Troubled Adult Child: A Lesson from Real LifeThis case of a violent adult son whose parents are in denial is an example of the extreme risks some parents face if they neglect essential safety precautions.
-
To Build Client Relationships That Last, Embrace SimplicityAs more automation becomes the norm, you can distinguish yourself as a financial professional by using technology wisely and prioritizing personal touches.
-
Client Demand Is Forcing Financial Advisers to Specialize: How to DeliverThe complexity of wealthy clients' needs — combined with AI and consumer demand — suggests the future of financial planning belongs to specialized experts.
-
Stocks Rise to the Spirit of the Season: Stock Market TodayInvestors, traders and speculators are beginning to like the looks of a potential year-end rally.
