Michigan Attorney General Dana Nessel has joined a coalition of 22 attorneys general in backing a Federal Trade Commission (FTC) order aimed at halting deceptive advertising practices by Intuit, the maker of TurboTax.
The order targets Intuit’s “misleading promotion” that falsely claims its preparation software is free when, in reality, most consumers end up paying for the service.
In the ongoing case of Intuit v. FTC, the attorneys general have filed a brief urging the U.S. Court of Appeals for the Fifth Circuit to uphold the commission’s order and dismiss Intuit’s appeal.
“Too many Americans have suffered unnecessary financial losses as a result of Intuit’s deceptive practices, especially low-income families and veterans who were otherwise eligible for free filing services elsewhere,” Nessel said in a news release Wednesday. “I stand firmly with my colleagues in urging the court to uphold the FTC's decision. We must hold corporations like Intuit responsible for deceptive and misleading advertisements.”
A few years ago, I was lured into using TurboTax when I saw an advertisement claiming it was free. But after spending more than a half hour filling out the electronic form, TurboTax demanded money for its services.
I felt conned. Since I had already filled out the form, I was on the verge of paying the fee and chalking it up to a lesson learned. But I decided the principle was more important and used another service that acknowledged up front that a fee was involved.
The actions by the attorneys general followed a significant settlement in 2022, when a coalition of 50 states and the District of Columbia settled for $141 million over the company’s deceptive marketing and advertising.
In 2023, the commission issued an order requiring Intuit to stop advertising products as free unless there is no cost to all consumers. The company appealed the decision and is seeking to overturn the FTC’s cease-and-desist order.
As a result of the deceptive advertising, millions of Americans, especially low-income taxpayers and military families, have been harmed, the attorneys general claim. The brief details how Intuit allegedly manipulated search results to entice consumers into paying for tax preparation software, even when they were eligible to file their taxes for free. Many TurboTax customers ended up paying for services they should have received for free.
The other states involved in the legal action are Illinois, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington, and Wisconsin, along with the District of Columbia.
