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FTC Orders TurboTax Maker Intuit To Stop Advertising ‘Free’ Services That Aren’t Free For Most Consumers
Intuit Inc.
The Federal Trade Commission on Monday ordered TurboTax maker Intuit Inc. to stop advertising its tex preparation products and services as free without disclosing who is eligible.
The FTC issued its final order on Monday, ruling that Intuit deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible, constituting deceptive advertising in violation of the FTC Act.
The Commissions opinion finding that Intuit has engaged in a ‘broad, enduring, and willful’ deceptive advertising campaign is a major win for consumers and honest marketers, Samuel Levine, Director of the Federal Trade Commissions Bureau of Consumer Protection, said in a statement.
The Commission conducted its own review of the facts and law to decide that Intuits claims that TurboTax was a ‘free’ service were wholly unsupported, and that the vast majority of tax filers were not eligible for the ‘free’ version of the service, Levine said. Instead, they were upgraded into costly deluxe and premium products.
The FTC’s order prohibits Intuit from advertising a product or service as free unless it is free to 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.
The order also prohibits Intuit from misrepresenting any material facts about its products or services, including not just prices and refund policies, but also consumers ability to claim a tax credit or deduction or to file their taxes online without using their paid service.
The Commission has issued an order setting forth a clear standard that Intuit must follow. They must stop their deceptive ads and tell the truth about how many people are actually eligible for their supposed ‘free’ products, Levine said. The order also sends a message across industry — ‘free’ means free — not ‘free for a few’ or ‘free for some.’ Businesses can expect an FTC enforcement action if they harness the power of ‘free’ in the dishonest way Intuit did.
TMX contributed to this article.
