On 15 September 2025, the FTC announced a complaint and simultaneous settlement with education technology provider Chegg, Inc., alleging the company violated ROSCA and Section 5 of the FTC Act by failing to provide a simple cancellation mechanism for its subscription services — resulting in $7.5 million in consumer redress.DOCUMENTED
- Chegg agreed to $7.5 million in consumer redress under the settlement.
- The FTC's complaint centers on ROSCA's requirement that a cancellation mechanism be at least as simple as the enrollment process, an allegation Chegg's process is said not to have met.
- This case is cited by legal commentary as part of a broader FTC enforcement wave against negative-option and subscription businesses that also includes actions against the operator of the LA Fitness chain, an unnamed education technology provider, and the escalated litigation against Uber's UberOne program.
Education technology as a subscription category under scrutiny
Chegg's core business — subscription access to textbook solutions, tutoring, and study materials — targets a customer base that is disproportionately young, often using a service for the first time without an established sense of what a "normal" cancellation process should look like, and frequently subscribing for a specific, time-limited need such as a single semester or exam period. That combination — inexperienced subscribers with a naturally time-limited need for the service — makes cancellation-flow friction particularly consequential in this specific product category, since students who intend to cancel once a semester ends are especially likely to be affected by exactly the kind of hard-to-find cancellation process the FTC alleges.REVIEWED
A smaller case, same underlying legal theory
At $7.5 million, this settlement is considerably smaller in dollar terms than the FTC's separate $35 million Shutterstock settlement or its $60 million Instacart settlement, but it rests on the identical legal theory: ROSCA's "simple mechanism" requirement applies regardless of a company's size or specific industry, and a cancellation process meaningfully harder than the sign-up process can itself constitute the violation. The consistency of this legal theory across companies as different as an image-licensing platform, a grocery-delivery service, and an education-technology provider indicates the FTC is applying a uniform standard rather than responding to industry-specific concerns.
Sources behind this report
Have documents relevant to this story? Reach us through our tips channel.