Chicago's Attorney General Kwame Raoul is spearheading a coalition, accompanied by D.C. Attorney General Brian Schwalb, as they submit a brief to the U.S. Court of Appeals for the 5th Circuit. This move comes in full support of the Federal Trade Commission's (FTC) decision to prohibit Intuit, the creators of TurboTax, from falsely marketing their tax preparation software as "free" when, in fact, it was not without cost for numerous consumers.
According to the Illinois Attorney General's office, Intuit made millions by misrepresenting their services to military families and low-income taxpayers, profiting from these groups that could have filed their taxes at no cost under a certain program - though they ended up paying for the service instead. "Intuit made millions by marketing tax preparation software as being free when its services were not free for many consumers, and by charging military families and low-income taxpayers for software when they likely could have filed their taxes for free," Raoul remarked.
The brunt of this misleading enterprise has been shouldered by millions of Americans as the brief filed by Raoul and the attorneys general from 22 states delineates. Intuit is claimed to have distorted search engine outcomes to ensnare consumers into using their paid service, even though they qualified for free tax filing. Intuit is battling to overturn the FTC's order which mandated a cessation of advertising the TurboTax products as “free” unless they are indeed, free to all consumers.
The coalition rigidly opposes Intuit's accusations that the FTC erred in enforcing statutes intended to protect consumers from business deceit. "The FTC correctly applied basic principles of consumer protection law, including that disclosures on advertisements for “free” items should be clear and conspicuous," was the collective stance voiced in their filing, as stated by the Illinois Attorney General's office. Additionally, the argument was made that even though Intuit had previously settled with a 50-state coalition in 2022, the FTC's order remains independently pertinent due to its broader scope and potential impact on preventing a variety of misleading tactics.
