Federal Trade Commission Issues Formal Complaint Against H&R Block In Unfair Marketing of Free File Program

According to the Federal Trade Commission, H&R Block’s free file program has been found to employ misleading marketing strategies.

The Federal Trade Commission (FTC) filed a complaint against H&R Block, alleging that the company was unfairly erasing customers’ tax information and forcing them to reach out to customer service when they switch to cheaper online options. Additionally, the company was accused of deceptively advertising their products as being “free” when in reality, many consumers were required to pay for them.

According to the FTC, H&R Block’s free file program can be challenging for customers because of the way it stores information. If a user inputs their information while using the paid version of the software and later switches to the free file option, their information will not be saved. However, if a customer starts with the free version and switches to the paid version, their information will be retained.

FTC alleges that H&R Block has not consistently communicated that the free filing promoted is exclusively accessible for individuals with “simple” tax returns.

According to Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, H&R Block has created their online products in a way that forces consumers to face tedious obstacles, ultimately pressuring them into paying more than necessary. The recent action taken by the FTC serves as a warning to companies that engage in such coercive tactics that they will be held accountable for any harm caused to consumers.

The Federal Trade Commission has issued a complaint against H&R Block, requiring them to address the accusations before October.

Authorities have the power to implement various limitations on how H&R Block promotes its free file programs. These restrictions may include a ban on utilizing a more intricate method for downgrading online products compared to upgrading them.

The accusation was made approximately one year subsequent to the FTC’s settlement with TurboTax concerning the promotion of a tax program for filing for free. As part of the agreement, the corporation was directed to compensate $141 million to more than 4 million clients who were potentially misled by TurboTax.

TurboTax is no longer involved in the tax program of the Internal Revenue Service that is free for filing taxes.

The Internal Revenue Service (IRS) maintains its collaboration with various organizations providing free filing services. Interested individuals can access the list of available programs on the official website of the IRS.

During this tax season, the Internal Revenue Service (IRS) is testing its own free online filing platform, available at https://directfile.irs.gov/, for US citizens residing in 13 different states.