from the it's-about-time dept
It must be tax season, because here we are yet again talking about Intuit and the company’s skullduggery when it comes to offers for “free” tax filing. You can go back and look at the plethora of posts we have done on all of this. The quick summary for you is that Intuit has deceptively advertised “free to file” programs for those it later says don’t qualify for free filing once the customer is nearly done inputting tax information, and that Intuit has had a long history of doing everything possible to hide the actual free options available to consumers in order to instead milk money from low-income taxpayers and military veterans. Notably, Intuit participated in the IRS’ free filing program, though the IRS actually announced plans to cut out the third parties in part because of Intuit’s bullshit practices.
But if you thought that Intuit would have learned any kind of lesson from all of this bad press and federal government scrutiny, you’d be sorely mistaken. Intuit continued advertising its TurboTax product as a method for “free filing” of taxes, in many cases in ads that made it sound like no other word other than “free” even existed in the English language. Instead of the IRS, this time it’s the FTC that has come knocking on Intuit’s doors, having filed an administrative complaint against the company for deceptive advertising. You can see the entire complaint embedded, but the FTC’s site has a nice summary of what it’s after here.
The Commission alleges that the company’s ubiquitous advertisements touting their supposedly “free” products—some of which have consisted almost entirely of the word “free” spoken repeatedly—mislead consumers into believing that they can file their taxes for free with TurboTax. In fact, most tax filers can’t use the company’s “free” service because it is not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income. In 2020, for example, approximately two-thirds of tax filers could not use TurboTax’s free product.
“TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, Director of the Bureau of Consumer Protection. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.”
Is this kind of too late given how deep into tax season we are? Yes! Do I believe that even this action will be enough to convince Intuit to stop being Intuit? Only if very real dollar amounts are involved in this action, which I don’t believe will be the case. But what this absolutely does represent is a continuation of the uptick in federal involvement and pressure on the company for what are absolutely bald-faced deceptive advertising practices.
The reason Intuit does all of this is because it gets to decide for itself who its free program applies to. Very little is done in advertising to alert the public that there are fairly strict restrictions for the free program, instead leading many consumers to spend time gathering and entering all of their tax information into TurboTax’s “free” filing website… only to be told at the very end that they don’t qualify to file for free. At that point, many in the public either give up on the dream of filing for free, or simply believe that they cannot file for free anywhere. So they fork over money to Intuit.
As detailed in the complaint, Intuit engaged in a years-long marketing campaign centered on the promise of “free” services. These ads have run during major events, including the Super Bowl, and have also aired during this year’s NCAA Basketball Tournament. In spite of this advertising, many consumers who took the time to gather their documents, entrust their personal information to Intuit, and begin the filing process found that they could not file their taxes for free.
The FTC’s involvement is a good start. But federal action needs much bigger teeth than what is on offer from the FTC if the government wants to put a stop to Intuit’s bullshit.