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Regulation and Compliance > Litigation

TurboTax to Pay $141M to Settle Claim It Duped Consumers

By Erik Larson

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TurboTax owner Intuit Inc. agreed to pay a total of $141 million to all 50 U.S. states to resolve claims that the online tax preparer duped low-income Americans.

Under the deal, Intuit will suspend TurboTax’s “free, free, free” advertising campaign, which lured customers with promises of free tax preparation, only to “deceive them into paying for services,” according to a statement Wednesday by New York Attorney General Letitia James, who led the states in an investigation.

James said her office opened the probe after the investigative group ProPublica reported that Intuit was using deceptive tactics to steer low-income consumers toward paid products and away from federally supported free tax services.

“Intuit also purposefully blocked its IRS Free File landing page from search engine results during the 2019 tax filing season, effectively shutting out eligible taxpayers from filing their taxes for free,” James said.

The deal comes as Intuit faces similar claims in a suit brought by the U.S. Federal Trade Commission, which accused the company of luring customers with free services and hiding the added costs in the fine print and hyperlinks. Last month, a judge said he’s not likely to immediately order Intuit to stop promoting some of its tax preparation services as free, as the FTC requested.

The judge in that case ruled that the urgency required to win such an order had likely come and gone with the April 18 deadline by which most Americans were required to file their tax returns this year.

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