The Federal Trade Commission (FTC) has sought a temporary restraining order and a preliminary injunction against Inuit Inc. over concerns that its TurboTax product, advertised as free, is often not so. Monday’s complaint said that the FTC wants the court’s assistance in halting the deceptive practices while it conducts an administrative trial on the merits of its claims.
Specifically, the filing explained that Intuit promotes and sells TurboTax, “a commonly-used online tax preparation service that enables users to prepare and file their income tax returns.” Its messaging conveys to consumers that TurboTax is free, which the FTC says is partly untrue.
In support of its argument, the complaint points to advertisements, including a television commercial in which almost every word said is the word “free.” In reality, the FTC argues that many users put time and effort into gathering and inputting their financial records in order to prepare tax returns only to discover that they need to upgrade to a paid service to complete and file their taxes.
In turn, this week’s complaint argues that the company’s false “freemium” model misleads unsuspecting consumers, including many low and middle-income Americans. Without the requested provisional relief, Intuit can keep disseminating its deceptive claims, harming consumers in violation of the FTC Act, the filing says.
This action is not the first to take issue with Intuit’s TurboTax. A consolidated class action brought by consumers and state enforcers proceeding in the same forum, the Northern District of California, settled but was denied preliminary approval last year. The court said that the $40 million settlement was insufficient to compensate aggrieved victims.
