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FTC Says TurboTax’s Free, Free, Free Ads Were False, False, False

Last week, the Federal Trade Commission issued an Opinion and Final Order against Intuit Inc., the maker of TurboTax, the most popular brand of tax preparation software, saying it had engaged in deceptive advertising practices. It had accused the company of running ads for free tax prep services for years but it appears the majority of those who signed up were not eligible for those free services. [See complaint.]

In some ads, like the one below, the word “free” is mentioned perhaps 20 times in a 30-second commercial.


*MOUSE PRINT:

The virtually unreadable fine print says that the free version is for simple returns only.

Under the FTC’s final order, Intuit has to make disclosures abundantly clear in its advertising about the limitation of their free edition.

*MOUSE PRINT:

The Commission’s Final Order prohibits Intuit from advertising or marketing that any good or service is free unless it is free for all consumers or it discloses clearly and conspicuously and in close proximity to the “free” claim the percentage of taxpayers or consumers that qualify for the free product or service. Alternatively, if the good or service is not free for a majority of consumers, it could disclose that a majority of consumers do not qualify. [Emphasis added]

Sure enough, last week Intuit began running new TV ads for TurboTax Free that unambiguously say that only about 37-percent of people will qualify to use the program free.


Whether the new ad is satisfactory to the FTC is for them to say, but it is refreshing to literally hear a company’s disclaimer rather than having to catch it in a too-quick and too-small-to-read footnote.

Since this was an internal administrative proceeding where the FTC cannot assess financial penalties, Intuit got off easy. Nonetheless, they have appealed the decision to court.

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8 thoughts on “FTC Says TurboTax’s Free, Free, Free Ads Were False, False, False”

  1. It’s definitely scammy. Our 21yo has a full-time job and rents. She takes the standard deduction. She has never been eligible for their free version, even when she was 16 and working at BK.

    This year she tried again, but when it came to the filing part, Intuit wanted almost $50 to complete the simple 1040, so she went to 1040.com (recommended by irs.gov) and did the same thing for free.

    Reply
  2. I did use TurboTax “free” a couple of years ago but when a credit card charge showed up, I decided not to use any of their services again. My phone call to them was useless. So I switched to a competitor OLT which worked perfectly well and did not charge.

    Reply
  3. I’ve used freetaxusa.com for years. Works fine for a 1040 with schedules a/b/c/d. Sometimes I pay to get additional services, usually don’t. Works great.

    Reply
  4. I’ve used freetaxusa.com the last several years. I’m also a proponent of giving the IRS the option to put up a web platform to process 1040s which would simplify a lot.

    Tax software advertisements are all over the place, but I’m glad the worst offenders are getting stopped.

    Reply
  5. Intuit is also quicken loans ,and Quickbooks.. for 25+ years i used Qbks and the always found a way to cut things and add fees so this is not a new way to cheat for them.

    Reply