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FTC Cracks Down On Intuit’s ‘Free’ Tax Service
The Federal Trade Commission has ordered Intuit to stop advertising its “free” tax service, saying the company “engaged in deceptive practices.”
Under US law, taxpayers that earn less than $69,000 per year can file their taxes free. While Intuit technically offers a free option, the company has faced ongoing accusations that it makes its free option difficult for users to find, thereby unfairly charging users who shouldn’t be paying.
The FTC has weighed in, upholding a decision by Chief Administrative Law Judge (ALJ), D. Michael Chappell “that Intuit has engaged in deceptive advertising in violation of Section 5 of the FTC Act and said that the defenses that Intuit raised lack merit.”
Under the FTC’s order, Intuit will not be allowed to market its services as “free” without significant changes to its current practices.
The Commission’s Final Order prohibits Intuit from advertising or marketing that any good or service is free unless it is free for all consumers or it discloses clearly and conspicuously and in close proximity to the “free” claim the percentage of taxpayers or consumers that qualify for the free product or service. Alternatively, if the good or service is not free for a majority of consumers, it could disclose that a majority of consumers do not qualify.
The order also requires that Intuit disclose clearly and conspicuously all the terms, conditions, and obligations that are required in order to obtain the “free” good or service. If the advertisement is space constrained and not displayed on any TurboTax website, app, email or other company owned or controlled platform, Intuit is not required to include all the terms and conditions in the advertisement itself but must disclose either that a majority of consumers do not qualify for free (if true) or the percentage that do as well as provide a link in such space-constrained online ads that details all the terms and conditions, according to the Commission order.
The order also prohibits Intuit from misrepresenting any material facts about its products or services such as the price, refund policies or consumers’ ability to claim a tax credit or deduction or to file their taxes online accurately without using TurboTax’s paid service.
FTC Cracks Down On Intuit’s ‘Free’ Tax Service
Staff
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