U.S. regulators have put an end to TurboTax maker Intuit Inc.’s misleading advertising practices by barring them from promoting their services as “free” without clearly disclosing eligibility. The Federal Trade Commission (FTC) ruled that Intuit engaged in deceptive practices by claiming people could file their taxes for free using TurboTax, even though many individuals did not qualify for such offerings.
FTC Upholds Decision Against Intuit
According to the FTC’s opinion and final order, Intuit saturated various media channels with misleading ads, reaching taxpayers nationwide. In response, the FTC has ordered Intuit to stop marketing its products or services as free unless they genuinely have no cost for all consumers. Furthermore, Intuit is required to disclose the percentage of eligible consumers and state if a majority of taxpayers do not qualify. The FTC’s order also mandates that terms and conditions for obtaining a free good or service should be transparently disclosed or linked, particularly when ad space is limited. Additionally, Intuit is barred from misrepresenting material facts about their products, including refund policies and pricing.
Intuit Appeals the Decision
Intuit expressed its dissatisfaction with the FTC’s decision, calling it “deeply flawed,” and indicated that it has appealed the ruling. The company believes that the outcome is a result of a biased and broken system where the FTC acts as the accuser, judge, jury, and appellate judge, all within the same case. Intuit is confident that it will prevail once the matter returns to a neutral body.
No Financial Penalty, but a History of Charges
The FTC’s order does not impose any financial penalty on Intuit. However, the company has faced significant charges before over the marketing of “free” services. In a settlement reached in 2022 with attorneys general from all 50 states, Intuit was required to suspend TurboTax’s “free, free, free” ad campaign and pay a restitution amount of $141 million to nearly 4.4 million taxpayers nationwide. The settlement checks were distributed last year. Low-income consumers, who were eligible for free, federally-supported tax services but paid TurboTax due to “predatory and deceptive marketing,” were the beneficiaries of the settlement.
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