The Federal Trade Commission (FTC) has entered into a settlement with Chegg, Inc., requiring the ed-tech provider to pay $7.5 million to resolve claims that it violated both the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA) by failing to provide consumers with a simple, clear way to cancel recurring subscriptions. The stipulated order imposes both monetary and operational obligations.
On September 16, 2025, the FTC announced a settlement with Chegg, Inc., requiring the company to pay $7.5 million and to change its subscription practices. The FTC alleged that Chegg violated the Restore Online Shoppers’ Confidence Act (ROSCA) and the FTC Act by failing to provide consumers with a simple and clear way to cancel recurring subscription charges.
According to the FTC’s complaint, Chegg’s cancellation process was difficult for consumers to use. The FTC also alleged that Chegg continued to charge some consumers even after they cancelled their subscriptions, charging nearly 200,000 consumers since October 2020 even after those consumers had requested cancellation. The complaint further alleged that refunds for erroneous charges were not available through Chegg’s online cancellation flow.
Under the FTC’s proposed order, Chegg will be required to pay $7.5 million, which the agency will use to provide refunds to consumers who were affected by the company’s cancellation practices. The company must also provide consumers with cancellation methods that are as simple as the sign-up process. For online services, cancellation must be easy to locate and complete. For telephone cancellations, the company must provide a clearly disclosed phone number that is available during normal business hours and not more burdensome or costly than the method used to enroll. The order also prohibits Chegg from misrepresenting its cancellation practices and requires it to maintain records of consumer complaints, refund requests, and subscription revenues for 10 years.
The FTC’s action reflects continued enforcement of requirements for negative-option subscriptions under ROSCA. The case emphasizes that businesses offering auto-renewing services must clearly disclose terms, obtain informed consent, and provide straightforward cancellation mechanisms.
Implications for Businesses
- Cancellation for recurring subscriptions must be at least as easy to complete as the enrollment process, across all platforms where consumers can sign up.
- Cancellation options should be easy to find and should not be obscured by additional offers or default settings that delay or discourage cancellation.
- Businesses should ensure that billing stops promptly upon cancellation and that refund policies are consistent with consumer expectations.
- Recordkeeping and compliance obligations can extend for many years, underscoring the importance of maintaining detailed documentation of subscription practices and consumer complaints.
- The FTC continues to prioritize enforcement in this area, making it important for companies with subscription models to review their practices.
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