TurboTax will refund $141 million to customers after allegedly steering them away from free services

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The settlement, announced Wednesday by New York Attorney General Letitia James, said about 4.4 million customers were “unfairly charged.” Intuit must also suspend its “free, free, free” advertising campaign because it falsely lured customers with the promise of free tax preparation services, the statement added.

In a report, Intuitive (INTU) said it “admitted no wrongdoing” under the agreement and expects “minimal impact to its business” from the required changes going forward.
James’ office said its investigation took place after a 2019 ProPublica Report accused the company of driving eligible customers away from federally-backed tax filing products by making them hard to find in web searches — instead directing them to the paid version of the tax filing services business. James said the tactic particularly targets low-income consumers.

Filers who used the free edition of TurboTax for the 2016 to 2018 tax years will receive a check in the mail for approximately $30 for each year they were charged when they should have been able to use the services free.

“Intuit tricked millions of low-income Americans into the free tax filing services they were entitled to,” James wrote in a press release. “For years, Intuit has cheated the most vulnerable among us for profit. Today, every state in the country holds Intuit accountable for defrauding millions of taxpayers, and we’re putting millions back in their pockets. Americans affected.”

The company responded in its statement that it was “clear and fair with its customers, including the nearly 100 million Americans who have filed their taxes for free with our products over the past 8 years – more than all other combined tax preparation software companies”.


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