In recent news, TurboTax maker Intuit faced a setback as the US Federal Trade Commission (FTC) put a stop to their advertising of “free” services, citing deceptive practices. This decision, following an administrative ruling in September, sheds light on Intuit’s long history of misleading consumers over six years.
FTC’s Final Decision: Clearing the Air
The FTC’s final order is crystal clear – Intuit cannot claim a service is free unless it genuinely is for all consumers or transparently discloses the percentage of eligible taxpayers. The commission labeled Intuit’s prior violations as “egregious,” pointing out their widespread use of misleading ads. These ads falsely convinced consumers they could file their returns for free, even though about two-thirds of taxpayers were ineligible.
Despite this, Intuit, the maker of TurboTax, plans to appeal. They maintain optimism, stating there’s no monetary penalty involved, and they expect no significant impact on their business. Intuit’s shares even closed up 1.4% at $630.61 on Monday, indicating resilience in the market.
Intuit’s History: $141 Million Restitution
This isn’t Intuit’s first rodeo with legal consequences. In May 2022, they agreed to pay a whopping $141 million in restitution to settle claims from all 50 US states and Washington DC. The allegations? Intuit misled millions into buying TurboTax products deceptively marketed as “free.”
The settlement addressed the issue of Intuit steering over 4.4 million customers, many with low incomes, into purchasing tax preparation products they were ineligible for regarding free electronic filing through the IRS. As part of the settlement, Intuit had to suspend ads containing slogans like “TurboTax Free is free. Free free free free,” though they didn’t admit wrongdoing.
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