FL Consumers To Receive $10.3M Refund From TurboTax Settlement

FLORIDA — Thousands of Florida consumers who were unfairly charged by TurboTax, Intuit Inc. will receive restitution, according to the Florida Attorney General's Office.

Florida Attorney General Ashley Moody announced Wednesday a settlement that includes more than $10.3 million in restitution from the owner of TurboTax, Intuit Inc., for misleading Florida consumers into paying for tax services that they could have received for free.

In total, Intuit will pay $141 million to customers in all 50 states and the District of Columbia.

In addition, Intuit must suspend TurboTax’s “free, free, free” ad campaign that allegedly lured customers with misleading promises of free, online tax-preparation services, when, in fact, many customers were directed to products that were not free.

“As a result of this multistate investigation, Intuit will have to pay more than $140 million in restitution for allegedly advertising free tax-preparation products and then directing many consumers to pay for upgrades in the service. Not only have we secured millions for those who were misled into paying for services that they could have obtained for free, we also stopped these deceptive practices both now and for future consumers of Intuit products," Moody said in a news release.

According to Moody, the multistate investigation found that Intuit engaged in deceptive and unfair trade practices that limited consumers’ participation in the Internal Revenue Service’s Free File Program. The company used confusingly similar names for both its IRS Free File product and commercial “freemium” product. In addition, the company used search-engine services that directed consumers who were looking for the IRS Free File product to the TurboTax “freemium” product instead. Intuit also blocked its IRS Free File landing page from search-engine results.

The investigation found that Intuit’s advertisements and its TurboTax website misled consumers into believing that taxes could be filed for free. Many consumers did not learn that payment would be necessary until spending time and effort inputting tax information into TurboTax. Moreover, the investigation found that some consumers eligible for Intuit’s IRS Free File product were misled to believe that an upgrade was necessary.

As a result of the multistate investigation, eligible Florida consumers who used TurboTax’s Free Edition, but were charged in tax years 2016 through 2018, will automatically receive a direct payment of approximately $30 for each year that this happened to them.

Those who are owed refunds do not need to do anything to receive restitution. They will automatically receive notices and a check by mail.

Intuit has also agreed to reform its business practices, including:

• Refraining from making misrepresentations in connection with promoting or offering any online tax-preparation products;
• Enhancing disclosures in its advertising and marketing of free products; and
• Not requiring consumers to restart tax filings if the consumer exits one of Intuit’s paid products to use a free product instead.

Moody said her office played a leading role in the investigation along with the attorneys general of Illinois, New Jersey, New York, North Carolina, Tennessee, Texas and Washington. The multistate investigation included the remaining 42 states and the District of Columbia.