Sept 15 (Reuters) - Chegg Inc. ( CHGG ) has agreed to pay $7.5
million to settle U.S. Federal Trade Commission claims that the
educational technology company made it difficult to cancel
subscriptions, according to court papers filed in San Jose,
California, on Monday.
Chegg ( CHGG ) buried cancellation options behind multiple menus on its
website, according to the FTC complaint, which joins a number of
recent FTC actions against companies over onerous cancellation
methods.
Chegg ( CHGG ) knew the process was difficult and confusing, the FTC
said,
citing internal emails
including a 2021 email from Nathan Schultz, who is now
Chegg's ( CHGG ) chief executive, saying there "should be some pain
involved" in cancellation.
A Chegg ( CHGG ) spokesperson said the company disagrees with the
FTC's claims but settled to avoid prolonged litigation.
A court this year blocked a Biden-era FTC rule that would
require companies to make it as easy to cancel services as it is
to sign up. The Trump FTC has used existing authority to sue
individual companies it says use overly burdensome cancellation
methods.
The FTC sued Uber Technologies in April alleging it
deceptively marketed
its Uber One subscription, and
sued the operators
of gym chain LA Fitness in August for burdensome membership
cancellation requirements.
The agency is also
gearing up for trial
next week in a case accusing Amazon.com of
enrolling users in Prime without their knowledge and making it
difficult to cancel the service. The companies are contesting
the allegations.