The Federal Trade Commission (FTC) in the United States has recently filed a complaint against the tax preparation company H&R Block. The FTC accuses H&R Block of misleading consumers with the marketing of its online tax-filing software, which is advertised as free but often incurs charges for many users.
According to the FTC, H&R Block’s advertising campaigns, including television commercials and online promotions, have consistently suggested that customers can file their taxes at no cost. However, this free offer is reportedly only applicable to simple tax returns, a term whose definition H&R Block has altered several times in recent years. The FTC highlights that the criteria for what constitutes a ‘simple return’ were not clearly communicated in the ads.
Furthermore, the FTC alleges that H&R Block has been deleting user tax data when they attempt to switch to more affordable options, compelling them to reach out to customer service. This practice, according to Samuel Levine, director of the FTC’s Bureau of Consumer Protection, creates an unnecessarily complex and frustrating experience for consumers, leading them to pay more for H&R Block’s services.
On its website, H&R Block lists several paid alternatives to its free version, with prices ranging from $35 to $85 for filing a federal return. Notably, the FTC is not pursuing any civil penalties in this case.
In response, H&R Block has defended its practices, asserting that they have consistently offered significant value and expertise to their clients, along with clear and fair pricing. The company also noted its long history of providing a free, do-it-yourself filing option for over 20 years, benefiting millions of American taxpayers.
This action by the FTC follows a similar case last month against Intuit, the makers of TurboTax, who were barred from advertising their services as free due to deceptive practices. Intuit, facing charges akin to those now levied against H&R Block, paid $141 million in restitution in 2022 and has stated its intention to appeal the FTC’s recent decision.
