WASHINGTON—Countless credit unions and their employees across the country provide assistance to members when it comes to filing taxes, and many of those members count on tax refunds to pay outstanding bills. One issue CUs may want to alert members of is a move by the Federal Trade Commission to that found Intuit Inc., the maker of TurboTax tax filing software, engaged in deceptive advertising in violation of the FTC Act.
The FTC said the company deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible.
In its Opinion, the Commission upheld the Chief Administrative Law Judge (ALJ), D. Michael Chappell’s opinion that Intuit has engaged in deceptive advertising in violation of Section 5 of the FTC Act and said that the defenses that Intuit raised lack merit. The Commission ordered Intuit to cease making the deceptive claims as outlined by complaint counsel, who are FTC staff in the Bureau of Consumer Protection.
What’s Been Ordered
- Prohibits Intuit from advertising or marketing that any good or service is free unless it is free for all consumers or it discloses clearly and conspicuously and in close proximity to the “free” claim the percentage of taxpayers or consumers that qualify for the free product or service. Alternatively, if the good or service is not free for a majority of consumers, it could disclose that a majority of consumers do not qualify, the FTC said.
- Requires that Intuit disclose clearly and conspicuously all the terms, conditions, and obligations that are required in order to obtain the “free” good or service. If the advertisement is space constrained and not displayed on any TurboTax website, app, email or other company owned or controlled platform, Intuit is not required to include all the terms and conditions in the advertisement itself but must disclose either that a majority of consumers do not qualify for free (if true) or the percentage that do as well as provide a link in such space-constrained online ads that details all the terms and conditions, according to the Commission order, the FTC said
- Prohibits Intuit from misrepresenting any material facts about its products or services such as the price, refund policies or consumers’ ability to claim a tax credit or deduction or to file their taxes online accurately without using TurboTax’s paid service, the FTC said.
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