Intuit Inc. misled consumers by claiming its TurboTax product was free when most customers needed to pay to use the popular tax preparation software, a Federal Trade Commission judge ruled.
In a decision dated Sept. 6 and released Friday, Administrative Law Judge Michael Chappell sided with the FTC, which alleged that Intuit deceived consumers with false advertisements. Intuit can appeal the judge’s ruling to the FTC’s commissioners.
Intuit “advertised to consumers that they could file their taxes online for free using TurboTax, when in truth, for approximately two-thirds of taxpayers, the advertised claim was false,” Chappell wrote.
He ordered the company to stop advertising that its products were free and include “clear and conspicuous” disclosures about when consumers are eligible for free tax-filing services.
Intuit said it will appeal the decision, calling the process “flawed and highly questionable,” in a blog post last week. The company said it already adheres to “most of the advertising practices” in the decision, and expects no significant impact to the business.
About 46% of taxpayers filed with do-it-yourself tools such as TurboTax in 2022, up from 35% a decade earlier, according to Wells Fargo & Co. analysts.
Intuit previously settled with state regulators over allegations it tried to upsell people who qualified for a federal free filing program. As part of that settlement, the company agreed to government monitoring for half a decade, to pay $141 million in fines and to be more clear in its web design and advertisements about which services are free.
But Intuit has fought the FTC’s case because the agency is seeking further restrictions on its business practices.
This article was provided by Bloomberg News.