TurboTax maker Intuit faces FTC ban on advertising 'free' services

Intuit is once again facing consequences for misleading advertising that claims it offers "free" services. The Federal Trade Commission (FTC) is banning TurboTax's maker from claiming services are free when most customers will end up having to pay. "We find that Intuit's ads on their face, expressly or by strong implication, conveyed to reasonable consumers the message that they can file their taxes with TurboTax for free," the FTC concluded. "Respondent's claims of free filing are false for roughly two-thirds of U.S. taxpayers, who do not meet Intuit's simple tax return qualifications and are therefore ineligible to file for free with TurboTax."

The FTC further emphasized that companies can't describe a product as "free, free, free" when most people will have a "fee, fee, fee" — a warning that's just waiting to be turned into an intimidating jingle. The regulatory body stated that Intuit must clearly state percent of customers would qualify for free services. Meanwhile, Intuit is appealing the decision, stating, "We believe that when the matter ultimately returns to a neutral body we will prevail."

Intuit isn't required to pay a fee for its transgressions this time. However, the FTC's ban comes nearly two years after Intuit reached a $141 million settlement with all 50 states and the District of Columbia. The company had to refund almost 4.4 million customers "for deceiving millions of low-income Americans into paying for tax services that should have been free," New York Attorney General Letitia James announced at the time.

Intuit was found to have pulled a bait-and-switch on customers, luring them in with the promise of free tax prep and then charging them when it was time to file. It also hid its IRS Free Filing page from search engine results for a tax season (and dropped out of the Free File Alliance in 2021). Intuit didn't admit to any wrongdoing and expressed no regret in a statement about the ordeal.

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