Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Ed tech company to pay $7.5 million to settle FTC charges of deceptive practices, (Sep 15, 2025)

By Jody Coultas, J.D.

The company allegedly failed to provide simple mechanisms to cancel recurring charges.

The FTC has announced that education technology company Chegg Inc. has agreed to settle charges filed by the FTC alleging the company made it extremely difficult for consumers to cancel recurring subscriptions while also failing to honor consumers’ cancellation requests. Chegg will be required to provide a simple cancellation mechanism for consumers in addition to the $7.5 million payment (FTC v. Chegg, Inc., Case 5:25-cv-07827, Sept. 15, 2025).

Chegg is an educational technology company that markets and sells various educational products and services through its websites, primarily to high school and college students. Among other things, Chegg sells and rents digital and physical textbooks to students and offers a variety of online subscription services, including study tools, homework help, and writing assistance.

Consumers who enroll in Chegg’s subscription services continue to have their subscriptions renewed and are charged until they affirmatively act to cancel their subscriptions. Chegg subscribers can cancel online or by contacting customer service via online chat, phone, email, or social media.

However, to cancel a subscription on chegg.com, subscribers must first locate the option to self-cancel. Until recently, Chegg buried the cancellation option, requiring consumers in many instances to navigate through several pages to even find and initiate the self-cancellation process. Consumers were unable to cancel subscriptions to Chegg Writing using mobile web browsers.

The FTC argued that Chegg knew its cancellation practices had generated numerous consumer complaints, including to the Better Business Bureau, state law enforcement agencies, social media, online review websites, and Chegg itself.

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 in violation of the Restore Online Shoppers’ Confidence Act (ROSCA) and FTC Act.

ROSCA prohibits charging consumers for goods or services sold in transactions effected on the Internet through a negative option feature, as that term is defined in the FTC’s Telemarketing Sales Rule (“TSR”), unless the seller: (a) clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer’s billing information; (b) obtains the consumer’s express informed consent before making the charge; and (c) provides simple mechanisms to stop recurring charges.

Specifically, the FTC alleged 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. Also, Chegg’s online cancellation processes for its various subscription services were allegedly 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.

Under the proposed order, Chegg will pay $7.5 million, which will be used to provide refunds to consumers impacted by Chegg’s deceptive cancellation practices. The proposed order also requires that Chegg maintain simple cancellation mechanisms for negative option features.

In 2022, the FTC and Chegg entered into a consent agreement requiring Chegg to take steps to improve its cybersecurity.

Companies: Chegg, Inc.

News: ConsumerProtection FederalTradeCommissionNews CaliforniaNews