The US Federal Trade Commission (FTC) has filed a lawsuit against software company Intuit for misleading consumers with ads pitching “free” tax returns.
In the lawsuit, the FTC alleges that Intuit’s ads touting their supposedly “free” products are misleading consumers into believing they can file their taxes for free through TurboTax, its tax software.
Intuit charged with misleading customers with free tax filing services
The FTC alleges that Intuit ran a years-long marketing campaign centered on the promise of “free” services. These ads, according to the FTC, have been shown at major events, including the Super Bowl, and have also aired during this year’s NCAA basketball tournament.
“TurboTax bombards consumers with ads for ‘free’ tax filing services, then charges them when it’s time to file,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
According to the FTC, consumers who took the time to collect their documents, entrusted their personal information to Intuit, and began their filing process, despite the ads, found that they couldn’t file their tax returns for free.
In an effort to prevent more tax applicants from being misled, the FTC is asking a federal court to immediately end Intuit’s false advertisements and has also authorized the filing of an administrative complaint alleging that the Company practices are illegal.
Intuit challenges FTC’s claims and vows to sue
In response, Intuit, which also makes TurboTax, QuickBooks, Mint, Credit Karma and Mailchimp, announced it will vigorously challenge the FTC’s complaint filed by the FTC in the U.S. District Court in the Northern District of California.
“The FTC’s arguments are simply not credible. Rather than diverting taxpayers away from free tax preparation offers, our free advertising campaigns have led more Americans to file their taxes for free than ever before and have been central to raising awareness of free tax preparation,” said Kerry McLean, executive vice president and general counsel for Intuit.
Inuit states that over the past eight years, TurboTax products have helped nearly 100 million Americans file their taxes for free. The free advertising campaign has only accelerated the use of TurboTax’s free offerings, growing about 60% from 11 million free filers in 2018 before launching to more than 17 million free filers in 2021. Intuit also stated that it Consumers had always supported Free as a founder of the IRS Free File program and in his other practices.
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