(WWLP) – Attorney General Maura Healey announced a 50-state settlement with TurboTax to resolve claims of deceiving people into paying for tax services that were advertised as free.
TurboTax’s’ ownership company, Intuit provided a product called TurboTax Free Edition with misleading advertisements, urging consumers that “free” was the only option, but is only free for about one-third of US taxpayers. According to a news release from the Boston office of the attorney general, 70 percent of taxpayers had received the TurboTax Free File product free.
An investigation into Intuit found that TurboTax was intentionally steering low-income consumers to its commercial services and away from federally-supported free tax services, including blocking search engine results for the IRS Free to File (IRS) Program.
The program allowed taxpayers to earn about $34,000 and military members to file taxes for free. The IRS didn’t compete with Intuit since it provided its own electronic tax preparation and filing services.
“TurboTax’s misleading tactics caused millions of vulnerable consumers across the country to pay for tax preparation services that should have been free,” said AG Healey. “This nationwide settlement will bring money back to Massachusetts consumers who were harmed and prevent this deception from happening again.”
Intuit, will pay $141 million back to users that used TurboTax’s Free Edition. A total of $2.3 million will go to the people of Massachusetts. Consumers will retrieve direct payments of about $30 for each year they had been misled into signing up for the program.
The company must also stop running its “Free, Free, Free” ad campaign to deceive them into paying for services.