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• Government Actions:

  Government Action: BBB reports on known government actions involving business’ marketplace conduct:

  FTC vs Chegg, Inc
  

  Chegg Inc. will be required to pay $7.5 million to settle Federal Trade Commission allegations that the education technology provider made it extremely difficult for consumers to cancel recurring subscriptions while also failing to honor consumers’ cancellation requests.
  
  
  
  For years, Chegg failed to provide consumers, namely students and parents, with a simple mechanism to cancel auto-renewing subscriptions for online learning tools such as homework help and writing assistance tools, according to the FTC’s complaint. Under a proposed order settling the FTC’s charges, Chegg will be required to provide a simple cancellation mechanism for consumers in addition to the $7.5 million payment. 
  
  
  
  “It harms the American people when companies fail to provide simple mechanisms to cancel recurring charges as Congress required in the Restore Online Shoppers’ Confidence Act,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “As part of our effort to reinvigorate the agency’s fraud program, the FTC will continue enforcing ROSCA against online sellers where they violate this important statute.”
  
  
  
  In its complaint, the FTC alleges that Chegg used unlawful cancellation practices that made it difficult, and in some cases nearly impossible, for consumers to cancel their recurring subscriptions. For example, the complaint alleges that:
  
  
  
  Chegg continued to charge some consumers even after they cancelled their subscriptions. Since October 2020, Chegg has charged nearly 200,000 consumers after they had requested cancellation.

  
  

  Chegg’s online cancellation processes for its various subscription services were buried on Chegg’s websites and required multiple clicks to locate.

  
  

  Even when consumers were able to successfully locate the cancellation process, consumers would still need to navigate a confusing and cumbersome process.

  
  

  Despite overwhelming consumer feedback and internal recognition that consumers faced difficulties with Chegg’s cancellation process, the company did not improve the visibility of the cancellation link.

  
  

  The FTC alleges that Chegg’s deceptive billing and cancellation practices violate the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which requires online retailers selling through negative option features to clearly and conspicuously disclose the material terms of the transaction, obtain consumers’ express, informed consent before charging them, and provide simple ways to stop recurring charges.

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