September 11, 2023: On Friday, Intuit, the parent company of TurboTax, is still facing blowback over claims it tricked people into using its “free” tax filing service that wasn’t free.
In a ruling on Friday, the Federal Trade Commission’s chief administrative law judge ruled that Intuit “deceived consumers” and “engaged in deceptive advertising.”
Intuit will appeal the ruling, said Rick Heineman, a company spokesperson stated.
“It’s no surprise that a case the FTC brought before itself, argued with FTC-employed lawyers, all before an FTC-employed judge got a ruling in favor of the FTC,” Heineman said.
The judge likewise issued a cease-and-desist order out of “cognizant danger of a recurring violation” against Intuit, which restricts the company from advertising goods and services as free unless it’s accessible to all customers, a majority of U.S. taxpayers, or clearly stating the limits. According to the FTC, the order must be shared with relevant parties for 20 years.
Shares of Intuit decreased 0.3% after hitting a 52-week high earlier on Friday.
In a 2022 administrative complaint, the FTC said that millions of taxpayers, including those who accept a specific 1099 form from the Internal Earnings Service or earn farm income, did not qualify for TurboTax’s “free” services. The protest said about two-thirds of filers could not use the free service in 2020.
Intuit agreed with all 50 states and the District of Columbia in 2022 to pay $141 million to users who paid for TurboTax when the filing software should have been free, a deal affecting about 4.4 million consumers.
Section 5 of the FTC Act bans companies from engaging in misleading acts or practices that can cause substantial injury to consumers.