WASHINGTON—The Federal Trade Commission said it is taking action against tax preparation company H&R Block for numerous alleged violations.
Those violations include “unfairly” deleting consumers’ tax data and requiring them to contact customer service when they downgrade to more affordable online products, and “deceptively” marketing their products as “free” when they were not free for many consumers, the FTC said.
In an administrative complaint, the FTC is alleging H&R Block’s online tax filing products lead consumers into higher-cost products made for more complicated tax filings, despite many consumers not needing the additional tax forms and schedules offered by those products.
Failure to Communicate
In addition, H&R Block failed to clearly explain which of its products cover what forms, schedules, or tax situations, leading many consumers to start completing their tax returns in products that are more expensive than they need.
“When consumers later realized they did not need or want those more expensive products, though, H&R Block presented them with a series of time-consuming challenges when attempting to downgrade after already spending substantial time entering their tax information,” the FTC said.
The Specifics
“Specifically, when consumers choose to downgrade, H&R Block requires consumers to contact its customer support via chat or phone,” the FTC continued. “Then, its system deletes all the tax data the consumers have entered, requiring them to start their tax return from scratch, creating a significant disincentive to downgrading. This stands in contrast to the upgrade process, where consumers’ data seamlessly moves to the more expensive product instantly,” the FTC said.
The complaint further alleges that while consumers can upgrade without contacting H&R Block customer service, the “opposite is true for the downgrade process. Since at least 2014, consumers attempting to downgrade have had to reach out to the company to request a downgrade – a process that has often been frustrating and time-consuming,” the FTC said.
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