Chegg ordered to pay $7.5M to settle FTC claims over cancellation practices

The FTC said that Chegg (CHGG) will be required to pay $7.5M 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 $7.5M 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.”