CHEGG INC
CHGG
Consumer Staples
2
exclusion reasons
1 theme
This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
Chegg operates a subscription-based online education platform that has been the subject of multiple regulatory and legal actions for deceptive and exploitative business practices. In September 2025, the Federal Trade Commission announced a $7.5 million settlement with Chegg over allegations that the company used deceptive billing and cancellation practices, violating the FTC Act and the Restore Online Shoppers’ Confidence Act. This followed a December 2021 shareholder class action lawsuit alleging securities fraud.
The company’s core model, which markets “study help” services, has been widely criticized as predatory. Its platform is frequently cited in academic integrity investigations for enabling cheating, with institutions reporting that Chegg shares detailed user data, including IP addresses and payment information, during official probes. While Chegg has sued Google for allegedly using its content to train AI models, its own business practices center on extracting recurring revenue from a student customer base often under acute academic pressure, with a documented pattern of making it difficult to cancel subscriptions and obtain refunds.
Chegg has demonstrated a pattern of regulatory violations across consumer protection and data security domains. In September 2025, the Federal Trade Commission announced a $7.5 million settlement with Chegg over allegations it violated the FTC Act and the Restore Online Shoppers’ Confidence Act by employing deceptive billing and cancellation practices for its auto-renewing subscription services.
This settlement follows a separate 2022 FTC action concerning the company’s data security failures. The FTC’s complaint alleged that Chegg’s lax cybersecurity procedures contributed to four separate data breaches between 2017 and 2020, which exposed sensitive personal information of millions of users, including financial and medical details. The FTC cited the company’s failure to implement basic security measures despite these repeated incidents. These two major enforcement actions, settled within three years and involving distinct operational failures, establish a pattern of systemic disregard for regulatory compliance and consumer protection obligations.
Research Sources
13 organizations
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Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
This information is provided for educational and transparency purposes only and should not be relied upon as investment advice. Data is drawn from independent watchdogs, NGOs, government registries, and Ethical Capital's ongoing research — see Research Sources for the full list.
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