FTC sues maker of TurboTax to stop ‘bait-and-switch’ ads

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The Federal Trade Commission is suing TurboTax maker Intuit, saying its ads for “free” tax filing misled consumers.

The consumer protection agency said Tuesday that millions of consumers cannot actually use the free tax-prep software option — two-thirds of tax filers in 2020. They are ineligible, the agency says, if they are gig workers or earn farm income, for example.

“TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, Director of the Bureau of Consumer Protection, in a statement. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.”

Intuit, based in Mountain View, Calif., did not immediately reply to a request for comment.

Federal Trade Commission
“We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season,” the FTC said.
Getty Images

The agency says Intuit has for years focused on the word “free” in its ads, running them during major events like the Super Bowl. The FTC has asked a federal judge to order Intuit to stop what it said were Intuit’s deceptive ads during the rush of tax season. This year’s tax filing deadline is April 18.

The FTC voted 3-1 in favor of filing the suit. The FTC complaint was filed Monday in US District Court in Northern California.

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