FTC accuses TurboTax of false advertising

The U.S. Federal Trade Commission has filed a lawsuit against Intuit, the parent company for TurboTax, accusing the company of false advertising when they told people they offered “free” tax filing, but then required many people to pay.

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In the lawsuit, filed Monday in California, the FTC said that TurboTax repeatedly advertises its product and service as free, but that in reality only “simple” tax returns qualify as free. In the lawsuit, the FTC also accuses Intuit of changing what “simple” means, so that more customers would be excluded from free services.

Federal Trade Commission v. Intuit by National Content Desk on Scribd

The FTC pointed to TurboTax’s advertising as deceptive, such as an ad campaign called “Free, Free, Free, Free,” which encompassed at least six different advertisements in which “free” was the only word used.

In its complaint, the FTC also said that customers who clicked a button saying “File for $0″ on the Turbo Tax website were not told they were ineligible for the “freemium” version of the site until they had already spent time inputting data into TurboTax.

In the complaint, the FTC said, “In truth, TurboTax is only free for some users, based on the tax forms they need. For many others, Intuit tells them, after they have invested time and effort gathering and inputting into TurboTax their sensitive personal and financial information to prepare their tax returns, that they cannot continue for free; they will need to upgrade to a paid TurboTax service to complete and file their taxes.”

In a statement to Reuters, Intuit said it planned to fight the FTC’s allegations. “While it is disappointing that the FTC chose to file this lawsuit, we look forward to presenting the facts in court and are confident in the merits of our position,” Kerry McLean, Intuit’s executive vice president, told Reuters.