Shutterstock to Pay $35 Million to Settle FTC Charges Over Deceptive Subscription Practices
Regulators say the stock media platform charged consumers without consent, hid auto-renewal terms, and made cancellations unnecessarily difficult
WASHINGTON, D.C. — Shutterstock Inc. will pay $35 million to settle Federal Trade Commission allegations that the online digital content platform illegally charged consumers without their informed consent, failed to disclose automatic renewal terms and cancellation fees, and made it needlessly difficult to cancel subscriptions.
The settlement resolves claims that the New York-based company, which licenses stock photos, graphics, videos, and music clips, reaped tens of millions of dollars through a range of unfair and deceptive practices dating back to at least 2020.
“Subscription and negative option features can be beneficial for both companies and consumers, making renewal simpler and streamlining payment processes,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “But these benefits depend critically on firms clearly disclosing material terms, securing express and informed consent before charging consumers, and ensuring cancellation is a straightforward and simple process. When firms fail to follow these simple principles, they deprive consumers of the ability to make informed choices, undermining consumer sovereignty and impeding competition.”
According to the FTC’s complaint, Shutterstock offered most of its content through online subscriptions, allowing consumers to download a specified number of photos or clips per month while retaining a license for a set period. Consumers could subscribe directly through the company’s website or by clicking on advertisements.
The agency alleged that Shutterstock failed to disclose important information about several of its plans, including annual paid-up-front subscriptions, annual paid-monthly plans, and on-demand “packs.” The company advertised on-demand packs as “Best for a one-time project” with “no commitment,” but failed to adequately disclose that the packs automatically renewed when the last download was used — and, until early 2024, that they automatically renewed after one year.
The complaint further alleged that the “plan selection” page of Shutterstock’s desktop enrollment flow frequently failed to clearly disclose that annual paid-monthly plans would automatically renew at the end of each year and that consumers would be charged a fee to cancel before the end of the term. The company often buried such details in difficult-to-find fine print, the FTC said.
Specifically, the FTC charged Shutterstock with:
- Failing to clearly and conspicuously disclose material terms before billing, including renewal terms, applicable cancellation fees, and the amount of those fees.
- Failing to obtain consumers’ express informed consent before charging their credit cards for subscriptions and content packs.
- Failing to provide simple cancellation mechanisms. Before 2024, consumers could not complete early cancellation online and were required to contact customer support by phone, chat, or email — a process the FTC described as complicated and time-consuming.
Under the proposed order, Shutterstock will pay $35 million, which will be used to provide full relief to harmed consumers. The order also prohibits the company from misrepresenting material terms of its subscription offerings, requires clear disclosure of those terms, mandates express informed consent for charges, and compels the company to maintain simple cancellation mechanisms for negative option features.
FTC Halts Health Care Scheme That Impersonated Government, Sold Bogus ‘PPO’ Plans to Desperate Consumers
Regulators say operation generated millions by deceiving uninsured Americans and falsely threatening already-insured customers with policy cancellation
MIAMI — A federal court in Florida has temporarily halted a nationwide health care scheme that allegedly impersonated government agencies and major insurance carriers to sell consumers supposedly comprehensive PPO plans — which in reality offered little more than discounts and capped payouts, the Federal Trade Commission announced Thursday.
The operation, operating under names including Innovative Partners and American Collective, also targeted consumers who already had health insurance, falsely claiming they needed to pay immediately to maintain or renew their coverage, according to the FTC’s complaint.
“Targeting unlawful conduct that drives up Americans’ costs, especially healthcare costs, is one of my top priorities,” said FTC Chairman Andrew N. Ferguson. “The Healthcare Task Force launched last month underscores my commitment to bringing the full strength of the agency to bear on the challenges facing American patients, providers, and communities. Under my leadership, the Commission will continue to pursue fraudsters who deceive or disadvantage people seeking medical treatment, and we will do so with every enforcement tool at my disposal.”
The FTC alleges that since at least early 2023, six defendants have jointly operated a fraudulent telemarketing scheme that took advantage of consumers seeking comprehensive health insurance coverage. Telemarketers often falsely told consumers they were buying “state issued” PPO insurance policies with no deductible, full coverage, and low or no co-payments.
When contacting consumers who already had insurance, the defendants’ telemarketers allegedly claimed they were calling from real insurance carriers or the government, warning that without immediate payment, their policies would be canceled.
The products being sold are not PPO plans or comprehensive health insurance policies and cannot be sold on any state or federal government health insurance marketplace, according to the complaint. Instead, the plans typically include a mix of medical discounts, ancillary products, and capped payouts for specific medical events such as emergency room visits — with some plans excluding hospital care entirely.
While at least one defendant has claimed they do not market or sell insurance, the complaint alleges that consumers are led to believe the products — which can cost hundreds of dollars monthly and thousands annually — will provide comprehensive coverage.
When consumers who enrolled in the supposed PPO policies attempted to use them, they discovered the products did not deliver the promised coverage, the FTC said. Some were forced to postpone care until they could obtain legitimate insurance, while others faced substantial medical debt. When frustrated consumers tried to cancel, the defendants often ignored them, and monthly payments continued.
The complaint alleges violations of the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act. The court has entered a temporary restraining order against the defendants, and the FTC is seeking refunds for affected consumers.
The defendants include Innovative Partners, LP (doing business as Innovative Health Plan or Healthcare Plan) and its Chief Technology Officer Amani Ibrahim Shokry; American Collective, LP (doing business as ACLP Health Plan); Papyrus Green Investments LLC; their owner Ahmed Ibrihim Shokry; and Health Plan Administrators, LLC.
The complaint was initially filed under seal in the U.S. District Court for the Southern District of Florida; the seal has now been lifted.
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