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Navigating TurboTax: 7 Crucial Things to Know After the FTC Ruling

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Navigating TurboTax: 7 Crucial Things to Know After the FTC Ruling

TurboTax, the widely used tax filing software, has recently come under scrutiny from the Federal Trade Commission (FTC) for deceptive advertising practices. In a final order and opinion, the FTC ruled that TurboTax engaged in misleading advertising and imposed restrictions on the company’s promotion of “free” services. Here are the top seven things you need to know about the FTC ruling and its implications for TurboTax users.

  1. Deceptive Advertising Unveiled: The FTC found TurboTax guilty of deceptive advertising by promoting “free” tax services that many customers did not qualify for. The company’s ads, targeting a broad audience, misled users about the eligibility criteria for their free services.
  2. FTC’s Verdict: Free for All or No Free Advertising: As a result of the ruling, TurboTax is now prohibited from advertising its services as free unless they genuinely offer free filing for all customers. The FTC has put a strict restriction on the company’s ability to market services as “free” without meeting the criteria specified in the ruling.
  3. Disclosure Requirements: To ensure transparency, TurboTax is now required to clearly disclose the percentage of customers who qualify for the free service. This information should be prominently displayed near any claim of a “free” service, allowing users to make informed decisions about their tax filing options.
  4. No More Misrepresentation: The FTC’s order prohibits Intuit, TurboTax’s owner, from misrepresenting any material facts about its products or services. This includes details such as price, refund policies, and consumers’ ability to claim tax credits or deductions without using TurboTax’s paid services.
  5. Check Refund for Millions: In a significant development, TurboTax has been ordered to issue refunds to approximately 4.4 million people following a 50-state settlement with parent company Intuit. This settlement is related to allegations that the company steered low-income Americans away from free tax-filing services.
  6. Historical Allegations and Settlement: The FTC investigation was initiated in response to a 2019 ProPublica report accusing TurboTax of directing eligible clients away from federally supported tax filing products. The alleged strategy involved making free services difficult to find in web searches, pushing users toward the paid versions.
  7. Restitution and Legal Implications: TurboTax’s deceptive marketing practices have faced legal consequences. The restitution process aims to compensate millions of low-income Americans who were misled into paying for services they should have received for free. The ruling serves as a crucial step in holding the company accountable for its actions.

TurboTax users should remain vigilant and informed about these changes to make the most out of their tax filing experience while avoiding deceptive practices. In the broader context, the FTC’s action against TurboTax highlights the significance of transparency in product and service advertising.

Why Choose Laukaitis Law if You Have a Deceptive Advertisement Issue

Deceptive Advertisements are a widespread issue that affects consumers across various industries, and our firm has the experience to assist clients with these concerns. If you believe you have been misled by a deceptive advertisement, Laukaitis Law is here to help.

Our law firm is dedicated to representing consumers in deceptive advertisement cases nationwide –  Contact us today for a free consultation!  

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