Automatic renewal programs and frictionless cancellation processes continue to garner significant regulatory scrutiny. Now, the Federal Trade Commission (“FTC”) is taking action against the software company, Adobe, and two of the company’s executives, Maninder Sawhney and David Wadhwani, regarding the company’s automatic renewal subscription practices, particularly as such practices relate to the company’s subscription enrollment and cancellation pathways. After investigating the company’s subscription practices, the FTC referred the matter to the United States Department of Justice, who in turn filed a complaint in federal court in the Northern District of California.
In a number of recent high profile cases, the U.S. Department of Justice’s Fraud Section, together with agents from the U.S. Postal Inspection Service, have been targeting fraudulent mail solicitations scams in the U.S. On May 31, 2024, a federal jury in Colorado returned guilty verdicts against two former senior officers of the Epsilon corporation who were charged with selling consumer lists to fraudsters targeting the elderly and vulnerable. The consumer mailing lists provided by the executives to the fraudsters were then used to send scam letters to the victims promising large prizes or falsely personalized astrological mailings promising wealth. In order to convict, the jury had to find that the two executives knew that the mailing lists would be used in the fraud scams. The case represents an expansion by the government in the scope of those charged in false mailing schemes, beyond the actual perpetrators, seeking to charge all those who knowingly aid and abet these schemes, and not just the mailers.