FTC Files Action Over TurboTax “Free” Claims

When the Federal Trade Commission (FTC) actually has guidelines concerning the use of a particular word, that would suggest caution in using that word. In this case, the word is “Free” and the FTC has guidelines concerning its usage which boils down to one sentence – “free” should mean “free”.

Anyone watching this year’s exciting NCAA basketball tournament likely saw one of the many TurboTax ads that claimed that “TurboTax Free is free. Free, free free free.”

The disclaimer, however, explained that it really was not free:

This year, consumers whose adjusted gross income is $73,000 or less can use products in the IRS Free File Program, which are offered by several different companies, to file their federal tax return and, in some instances, state tax return, entirely for free. More information about the Free File Program is available at irs.gov/freefile.

The Federal Trade Commission acted swiftly by filing an administrative complaint against Intuit, the maker of Turbo Tax. According to the complaint, the ads misled consumers into believing that they can file their taxes for free with TurboTax when the reality was nearly two-thirds of tax filers could not use TurboTax’s free product.

In its press release, the FTC stressed:

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

FTC Sues Intuit for Its Deceptive TurboTax “free” Filing Campaign

Just another reminder that (i) advertising claims involving the word “Free” should truly be free; and (ii) if not the advertiser likely will not be free of the FTC.