The U.S. Federal Trade Commission (FTC) has filed a lawsuit against H&R Block, a major tax preparation company, citing deceptive practices in their “free” online filing advertising. The FTC alleges that H&R Block leads consumers into higher-cost products designed for more complex tax filings, without clearly explaining which forms, schedules, or tax situations are covered by each product. The complaint highlights issues such as the lack of clarity in defining a “simple return,” seamless transitions to more expensive products, and difficulties in downgrading to cheaper options, ultimately resulting in frustrated users abandoning their tax returns. Additionally, the FTC targets H&R Block’s advertising practices, asserting that the company’s long-promoted “free” online tax preparation service is misleading and often fails to define the criteria for a “simple return.”
The FTC’s concerns extend beyond product downgrades, addressing the allegedly deceptive nature of H&R Block’s advertising. The company is accused of marketing its online tax preparation services as “free” without adequately clarifying the eligibility criteria. The complaint points to disclaimers buried in fine print and changing definitions of a “simple return” over the years, leading to consumer confusion. In response, Dara Redler, Chief Legal Officer at H&R Block, contends that the company has provided a free do-it-yourself (DIY) filing option for over two decades, emphasizing the multitude of resources offered to filers. The FTC’s action against H&R Block follows a similar order to TurboTax-maker Intuit last month, urging them to stop promoting products and services as “free” unless they genuinely cater to all customers.
