FTC alleges H&R Block used deceptive marketing and wiped tax filers’ data

After TurboTax manufacturer crackdown intuitionthe Federal Trade Commission filed an administrative complaint. H&R Blockalleges that the company deceptively marketed its free filing product and wrongfully deleted users’ tax data.

According to the complaint, H&R Block sold free products to many ineligible consumers, making it difficult to downgrade. One of the hurdles in switching products was “data wipe,” or removing a user’s ongoing tax filing information, requiring them to start all over again.

“H&R Block designed its online products to present consumers with an obstacle course of tedious challenges and cause them to overpay for their products,” FTC Consumer Protection Director Samuel Levin said in a statement Friday. said.

Downgrading requires tax preparers to contact customer support via chat or phone, but product upgrades are “seamless,” the complaint alleges.

“We provide our clients with tremendous value, unparalleled tax expertise, and fair and transparent pricing,” Dara Redler, H&R Block’s chief legal officer, said in an emailed statement. I believe that.” She said, “H&R Block allows consumers to downgrade to cheaper DIY products through multiple mechanisms while still creating accurate tax returns.”

Ed Mierzwinski, a consumer advocate with the U.S. Public Interest Research Group, said PIRG is warning that the FTC is pursuing H&R Block and Intuit for “misleading” or “deceptive” promises of free tax filing products. He said he was pleased.

This is the FTC’s second lawsuit against a tax preparation software provider in recent history. Last month, the FTC upheld a September ruling that found TurboTax maker Intuit violated federal law and banned the company from false advertising. According to the opinion, Intuit sold free TurboTax software to ineligible filers and upgraded them to deluxe and premium products.

An Intuit spokesperson said the company is appealing the “deeply flawed decision” and expects to prevail “if this matter ultimately returns to a neutral body.”

Meanwhile, several free tax options are available to consumers this season, including Direct File Examination through the IRS, limited to certain taxpayers in 12 states through mid-March. We plan to provide free tax returns. Last week, IRS officials said the pilot would soon be available to the public in 12 states “for a short period of time and without notice.”

Taxpayers can also take advantage of tools like IRS Free File, which provides free guided software for filers with 2023 adjusted gross income of $79,000 or less.

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