Published
November 7, 2026
Court records allege that nearly 200,000 students paid for monthly services they did not want because of confusing website designs. Other users had their private email addresses stolen by hackers due to poor digital security. Reviewing these legal cases helps you protect your digital identity and your bank account while you are in school.
Chegg’s legal timeline (2021–2026)
Tracking these court battles shows how consumer protection agencies crack down on unfair educational software. The platform faced intense legal scrutiny from the federal government, private citizens, and angry investors. These cases highlight the dark side of the booming educational technology sector.In a major securities fraud case, investors sued the company for allegedly hiding why their user base grew so fast during the pandemic. Chegg eventually paid a $55 million settlement to resolve claims that they artificially inflated their stock price. They allegedly downplayed how many students used the site strictly for unproctored test cheating while schools were closed.
When schools reopened and physical classrooms returned, subscriptions plummeted and the company's stock crashed. To make matters worse, Chegg and other digital publishers also argued that Google answering questions directly on the search page amounted to unfair competition. However, federal courts broadly ruled that web platforms do not possess a legal right to automated search engine traffic.
Review these other legal challenges the company faced as they fought to survive:
- 2025: Filing a desperate antitrust lawsuit against Google, accusing it of stealing search traffic with AI overviews
- 2025–2026: Battling federal courts over search engine rights and automated web traffic scraping
- 2022: Facing class-action lawsuits over hidden recurring charges and confusing billing terms
Subscription traps: The FTC and auto-renewal cases
Deceptive automatic billing systems trick students into paying for monthly services long after the semester ends. The Federal Trade Commission (FTC) officially stepped in to stop companies from using confusing website designs to trap vulnerable customers.In late 2022, a class-action lawsuit called Moyer v. Chegg accused the platform of charging users without clear upfront consent. The lawsuit claimed the company violated specific consumer laws by burying the continuous-service auto-renewal terms in tiny fine print. This mirrored a wider national regulatory crackdown on companies that use continuous billing models.
Many students only realized they were still paying for the service when they checked their bank statements months later. Students on tight budgets cannot afford unexpected recurring charges.
The FTC formally settled with Chegg for $7.5 million after targeting these deceptive digital "dark patterns." The government alleged that the platform intentionally made it hard for students to cancel their monthly or annual memberships. The FTC said this practice violated the Restore Online Shoppers’ Confidence Act (ROSCA). Chegg settled without admitting wrongdoing.
40 million accounts exposed: The data breach claims
Weak digital security policies put your personal passwords and private email addresses directly into the hands of online hackers. An unauthorized party easily breached Chegg’s databases because the company stored user passwords using an outdated MD5 hashing system. Modern cybersecurity experts abandoned this weak encryption method over a decade ago.This security failure in April 2018 exposed the private data of roughly 40 million unsuspecting users. The FTC alleged that the educational platform lacked even basic written security policies to protect their customers. They operated a large digital business without treating user data with the respect it deserved.
When a company fails to protect your information, you become highly vulnerable to identity theft. Once your data is exposed, hackers frequently buy and sell these stolen email lists on the dark web to target college students with fake student loan emails.
The FTC issued a strict consent order requiring the company to drastically overhaul its digital safety measures. To prevent future leaks, the platform must now follow strict data minimization rules to ensure they only keep what is absolutely necessary.
The FTC forced Chegg to add the following safety measures:
- Multi-factor authentication (MFA) offered for user and employee accounts across the platform
- Comprehensive internal security training programs for all corporate employees
- Upgraded modern encryption standards for all password storage and recovery
- Strict limits on what personal data the company can legally keep on its servers
How to choose a homework help service without getting burned
Picking an ethical academic service guarantees you get the help you need without risking your credit card information. You should only use platforms that clearly display their transparent pricing before asking for your sensitive billing details. Hiding prices until the checkout screen is a huge red flag.If you find yourself desperate and typing do my homework into a search engine, always look for websites that offer one-time payment options. You want a service where you pay for what you need once, with zero strings attached.
Checking a company's cancellation policy takes two minutes but saves you months of frustrating bank disputes. A trustworthy service lets you delete your account and remove your payment methods with a single click on your profile page. Never trust a company that requires you to call a customer service hotline just to cancel your web subscription.
Follow this simple checklist before giving any educational platform your hard-earned money:
- Search for consumer complaints about unexpected auto-renewals online
- Verify they use transparent pricing with no surprise charges
- Confirm they offer a simple, one-click cancellation button in the account settings
- Read their privacy policy regarding data sharing and third-party sales
- Ensure they offer two-factor authentication to protect your account
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About This Page
OpenClassActions.com is a consumer news and information site, not a law firm. This article is general information about lawsuits and regulatory actions involving Chegg. Claims described in lawsuits and FTC complaints are allegations; Chegg has denied wrongdoing, and its settlements were made without any admission of liability. It is not legal advice, and reading it does not create an attorney-client relationship.
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