FTC Cracks Down on Intuit’s Misleading “Free” TurboTax Ads

Key Points:

– The Federal Trade Commission (FTC) has taken action against Intuit Inc., the maker of TurboTax, for deceptive advertising practices.

– The FTC ruled that Intuit cannot advertise its services as “free” unless they are genuinely free for all customers or if eligibility criteria are clearly disclosed.

– Intuit must now disclose the percentage of consumers eligible for free services and note if a majority of taxpayers do not qualify.

– The company is prohibited from misrepresenting any material facts about its products or services, including refund policies and price points.

– Intuit has appealed the FTC’s decision, claiming it is biased and flawed.

– This ruling comes after a previous settlement in 2022, where Intuit agreed to suspend its “free, free, free” ad campaign and pay $141 million in restitution for misleading advertising.

FTC’s Order:

– Intuit is prohibited from marketing its products or services as free unless there is no cost for all customers.

– The company must disclose the percentage of consumers eligible for free services and indicate if a majority of taxpayers do not qualify.

– Terms and conditions for obtaining free goods or services must be clearly disclosed or linked to if ad space is limited.

– Intuit is barred from misrepresenting any material facts about its products or services, including refund policies and price points.

Intuit’s Response:

– Intuit has appealed the FTC’s decision, stating that it is “deeply flawed” and the result of a biased and broken system.

– The company believes it will prevail when the matter ultimately returns to a neutral body.

– Intuit has a history of opposing efforts to implement a government-run free federal tax-filing system.

Background:

– In September 2022, FTC chief administrative law judge D. Michael Chappell ruled that Intuit violated federal law by engaging in deceptive advertising.

– Intuit has previously faced charges for marketing “free” services.

– In 2022, a settlement was reached with the attorneys general of all 50 states, requiring Intuit to suspend its “free, free, free” ad campaign and pay $141 million in restitution to nearly 4.4 million taxpayers nationwide.

– Settlement checks were sent out last year to low-income consumers eligible for free, federally-supported tax services but were misled into paying for TurboTax due to deceptive marketing.

Conclusion:

The FTC’s order against Intuit serves as a strong warning to companies engaging in deceptive advertising practices. Consumers must be provided with accurate and transparent information to make informed decisions about products and services. Intuit’s appeal of the FTC’s decision highlights the company’s continued resistance to providing genuine free tax-filing services to all taxpayers.