FTC calls Intuit deceptive for its ‘free’ Turbotax ads

23 Jan 2024

Image: © Sundry Photography/Stock.adobe.com

The FTC has prohibited Intuit from advertising that any good or service is free unless it is actually free for all consumers, while the company plans to appeal the agency’s order.

Financial software provider Intuit has drawn the ire of the US Federal Trade Commission (FTC), which claims the company engaged in deceptive advertising practices.

The US agency claims Intuit deceived consumers by running ads for “free” tax products and services, when many consumers were ineligible for them. The issue relates to TurboTax, Intuit’s tax management and assistance platform.

In the initial complaint, the FTC argued that most tax filers in the US are unable to use the “free” service advertised by TurboTax because it is not available to certain types of taxpayers, such as those who work in the gig economy. The FTC claims that in 2020, “approximately two-thirds of tax filers could not use TurboTax’s free product”.

The FTC has issued a final order prohibiting Intuit from advertising that any good or service is free unless it is actually free for all consumers, or it discloses “clearly and conspicuously” the percentage of consumers that qualify for the free product or service.

This order also requires that Intuit clearly discloses all the terms, conditions and obligations that are required in order to obtain a “free” good or service, or a link to that information where an advert is limited in space. Intuit has been given one year to submit a detailed compliance report to the FTC, which will show how the company is complying with the order.

Intuit plans to immediately appeal the decision and also claimed that it expects “no significant impact to its business”, Reuters reports. The FTC order includes no monetary penalty for the company.

Last year, the company agreed to pay a settlement of $141m to 4.4m people because it allegedly charged them for tax-filing services that they could have done for free.

Intuit provides a variety of financial tech products to more than 100m customers globally, including TurboTax and QuickBooks, an accounting software service.

In 2021, Intuit acquired the marketing platform Mailchimp for roughly $12bn in a cash and stock deal. The company said this Mailchimp acquisition would help it provide the services that small and medium businesses need to grow.

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Leigh Mc Gowran is a journalist with Silicon Republic