FLORIDA – Thousands of Florida consumers who were unfairly charged by TurboTax, Intuit Inc. will receive restitution, according to the Florida Attorney General’s Office.
Florida Attorney General Ashley Moody announced on Wednesday awhich includes more than $10.3 million in compensation from TurboTax owner Intuit Inc. for misleading Florida consumers into paying for tax services they could have received for free.
In total, Intuit will pay $141 million to customers in all 50 states and the District of Columbia.
Additionally, Intuit must suspend TurboTax’s “free, free, free” ad campaign that allegedly lured customers with deceptive promises of free online tax preparation services, when in fact many customers were being directed to products that were not free.
“As a result of this multi-state investigation, Intuit will have to pay more than $140 million in restitution for allegedly advertising free tax preparation products and then ordering numerous consumers to pay for upgrades. Not only did we get millions for those who were misled into paying for services they could have gotten for free, we also ended these deceptive practices both now and for future consumers of Intuit products,” Moody said in a press release.
According to Moody’s, the multistate investigation found that Intuit engaged in deceptive and unfair business practices that limited consumer participation in the Internal Revenue Service’s free files program. The company has used confusingly similar names for its IRS Free File product and its commercial “freemium” product. In addition, the company used search engine services that directed consumers searching for the IRS Free File product to the “freemium” TurboTax product. Intuit also blocked its IRS Free File landing page from search engine results.
The investigation found that advertisements by Intuit and its TurboTax website misled consumers into believing that taxes could be filed for free. Many consumers did not learn that the payment would be required until they spent time and effort entering tax information into TurboTax. Additionally, the investigation found that some consumers eligible for Intuit’s IRS Free File product had been misled into thinking an upgrade was needed.
As a result of the multi-state survey, eligible Florida consumers who used the free edition of TurboTax, but were billed in tax years 2016 through 2018, will automatically receive a direct payment of approximately $30 for each year it happened to them.
Those who owe refunds do not have to do anything to receive the refund. They will automatically receive invitations and a check by post.
Intuit also agreed to reform its business practices, including:
- Refrain from making false statements in promoting or offering online tax preparation products;
- Improve disclosures in its advertising and marketing of free products; and
- Do not require consumers to start their tax returns over again if they switch from one of Intuit’s paid products to use a free product instead.
Moody said his office played a lead role in the investigation along with attorneys general from Illinois, New Jersey, New York, North Carolina, Tennessee, Texas and Washington. The multi-state survey included the remaining 42 states and the District of Columbia.