Chegg to Pay $7.5 Million to Settle FTC Claims Over Subscription Cancellation Process

By Katherine Hamilton

Chegg will pay the Federal Trade Commission $7.5 million to settle allegations that it made it extremely difficult for customers to cancel their recurring subscriptions.

The FTC said Monday that Chegg, an online education platform, didn't give consumers a simple way to cancel automatically renewing subscriptions for tools such as homework help and writing assistance. Chegg also continued to charge some customers after they had cancelled their subscriptions, the FTC said.

Shares fell 7% to $1.42 on Monday. The stock has lost 12% of its value this year.

Since October 2020, Chegg has charged nearly 200,000 consumers after they requested cancellation, the FTC said. The platform buried the page for cancelling subscriptions, which required multiple clicks to find, it said.

The FTC alleged these issues violate the Restore Online Shoppers' Confidence Act, which requires online retailers to clearly disclose the material terms of the transaction and provide simple ways to stop recurring charges.

The settlement payment will be used to provide refunds for consumers impacted by the cancellation practices, the FTC said. Its proposed order also requires Chegg to maintain a simple way to cancel subscriptions.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

September 15, 2025 12:35 ET (16:35 GMT)