The US Federal Trade Commission (FTC) has taken a decisive step by prohibiting Intuit, the creator of TurboTax, from advertising or marketing its services as “free” when many consumers do not qualify, citing deceptive practices.
In response to the ruling, Intuit announced its intention to appeal, expressing confidence in eventual success. The FTC’s final order, following a September administrative ruling, mandates that Intuit cannot advertise any service as free unless it is genuinely free for all consumers or accurately discloses the percentage of eligible users for the free product. The commission characterised Intuit’s prior violations as “egregious,” accusing the company of running deceptive ads nationwide for at least six years.
“We believe that when the matter ultimately returns to a neutral body, we will prevail,” stated Intuit in response to the FTC’s decision. The company emphasised that there is no monetary penalty associated with the FTC’s order, expecting no significant impact on its business.
Despite the regulatory setback, Intuit shares closed up 1.4 per cent at $630.61 on Monday. The FTC’s ruling comes in the wake of Intuit’s agreement in May 2022 to pay $141 million in restitution to settle claims from all 50 US states and Washington, D.C. The settlement addressed allegations that Intuit deceptively advertised its online TurboTax products as “free” and misled millions of customers, particularly those with low incomes.
The FTC’s ruling requires Intuit to ensure accurate and transparent communication regarding the eligibility of users for free tax preparation services. It was further pointed out that Intuit knowingly ran ads misleading consumers into believing they could file their returns for free, even though a significant portion of taxpayers did not qualify.
Intuit, while maintaining its commitment to free tax preparation, had previously agreed to suspend ads containing slogans like “TurboTax Free is free. Free free free free” as part of the settlement with states in May 2022.
(With inputs from Reuters)
Source: Thanks WIONews.com