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The FTC is reinvigorating its focus on fraudulent practices in e-commerce — and subscription services are in the spotlight. On September 15, 2025, the FTC announced a settlement with EdTech company Chegg, Inc., requiring the company to pay $7.5 million and overhaul its cancellation practices. The Commission alleged that Chegg:
- hid cancellation links behind multiple menus;
- forced consumers (both parents and students) through multi-step "retention" flows; and
- continued charging nearly 200,000 consumers after they attempted to cancel.
Under the settlement order, Chegg must provide a simple cancellation mechanism that is at least as easy to use as the enrollment process, and ensure charges stop immediately when a consumer cancels.
ROSCA in the Spotlight
The Restore Online Shoppers' Confidence Act (ROSCA) requires clear disclosures, affirmative consent and a simple method to stop recurring charges. Although the Eight Circuit vacated the FTC's proposed amended Negative Option Rule earlier this year, the Chegg case demonstrates that the agency is aggressively pressing ahead under its existing authority.
Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection, emphasized:
"It harms the American people when companies fail to provide simple mechanisms to cancel recurring charges as Congress required in [ROSCA]. 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."
Implications for Subscription Businesses
The FTC is making clear that subscription services remain a core focus of its fraud program. In a blog post accompanying the Chegg settlement, the agency warned:
"Know that the FTC is working to reinvigorate its fraud program and takes ROSCA violations seriously: do not deceive consumers signing up through negative option features. And make sure consumers know where to locate your cancellation method, and that the cancellation process is not confusing or difficult to use."
This settlement underscores the FTC's focus on tangible subscription and e-commerce fraud, as well as monetary harm to consumers, despite the vacation of the Negative Option Rule. Cancellation must be frictionless, and certainly no harder than sign-up. Complicated multi-step hurdles, prompts to "save-your-subscription" and delays in processing cancellations will attract scrutiny. The Commission also highlighted Chegg's awareness of consumer complaints, signaling that ignoring such feedback increases regulatory risk.
Subscription-based businesses should review their own subscription flows to ensure compliance with ROSCA and confirm they are not using any dark patterns in their sign-up or cancellation practices.
Beyond Subscriptions: Fraud in E-Commerce
The Chegg action follows closely on the FTC's first enforcement of the INFORM Consumers Act against Temu earlier this month. In that case, Temu agreed to pay a $2 million penalty for failing to disclose information about high-volume third-party sellers and for lacking required reporting mechanisms for suspicious activity.
These recent regulatory actions, which occurred despite a general trend toward deregulation in the advertising industry, illustrate the FTC's broader strategy of targeting deceptive practices across subscriptions, retail platforms and e-commerce ecosystems.
The Bottom Line
- ROSCA is the enforcement backbone for online subscription services. In the absence of an updated federal framework, the FTC is actively using ROSCA to police auto-renewal practices.
- Cancellation must match sign-up. The process must be at least as simple as enrollment — and should be immediate.
- Dark patterns draw fire. Confusing flows, post-cancellation billing surprises or ignored complaints are enforcement magnets.
- The FTC's fraud program is being actively reinvigorated. The FTC's own words make clear that subscriptions and deceptive retail practices are squarely in the crosshairs.
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