The provider of TurboTax return preparation software is prohibited from advertising or marketing free services unless they’re free for all consumers, under an order issued by the Federal Trade Commission.
An opinion and final order issued January 22 found that Intuit Inc. engaged in deceptive advertising on television and radio and online stating that consumers could file their returns for free using TurboTax, when two-thirds of taxpayers weren’t eligible to do so. The final order upholds a September 8, 2023, ruling by the FTC’s chief administrative law judge.
In 2022 Intuit entered into a settlement with attorneys general in 50 states and the District of Columbia in which it agreed to pay $141 million to consumers who were purportedly misled into paying for return preparation services after believing they were eligible for free services. But the FTC found that “a ‘cease-and-desist’ order is essential” because the state settlement contained loopholes and “provides only incomplete relief.”
According to the FTC, Intuit’s widespread, deceptive advertising campaign has gone on for years and continues “even after lawsuits and government investigations raised serious concerns” about the lawfulness of those tactics.
In a statement, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, called the opinion and order “a major win for consumers and honest marketers” that provides a standard that Intuit must follow to stop the deceptive ads about the free availability of its products.
The opinion and final order also sends a message to the industry informing businesses to “expect an FTC enforcement action if they harness the power of ‘free’ in the dishonest way Intuit did,” Levine said.
In a statement, Intuit spokesman Derrick Plummer slammed the opinion and order as “the result of a biased and broken system where the Commission serves as accuser, judge, jury, and then appellate judge all in the same case.”
Intuit has appealed the decision in federal court, according to Plummer. “We believe that when the matter ultimately returns to a neutral body Intuit will prevail,” he added.