TurboTax customers, deceived into paying for what should have been free, will get checks soon from $141M settlement

Those affected were low-income consumers eligible for free tax services — but paid TurboTax to file their IRS returns during the 2016, 2017 and 2018 tax years due to “predatory and deceptive marketing.”

SHARE TurboTax customers, deceived into paying for what should have been free, will get checks soon from $141M settlement
A TurboTax display at a Costco Warehouse. TurboTax’s owner Intuit Inc. was ordered to pay $141 million to low-income consumers who were deceived into paying TurboTax to file their federal returns — despite being eligible for free, federally supported tax services. Now, customers are in line to get checks with repayments.

TurboTax’s owner Intuit Inc. was ordered to pay $141 million to low-income consumers who were deceived into paying TurboTax to file their federal returns — despite being eligible for free, federally supported tax services. Now, customers are in line to get checks with repayments.

Gene J. Puskar / AP

Millions of Americans who qualified for free tax services — but were instead deceived into paying TurboTax for their returns — will soon get settlement checks in the mail.

In a settlement last year, TurboTax’s owner Intuit Inc. was ordered to pay $141 million to 4.4 million people across the country.

Those affected were low-income consumers eligible for free, federally supported tax services — but paid TurboTax to file their federal returns during the 2016, 2017 and 2018 tax years due to “predatory and deceptive marketing,” New York Attorney General Letitia James said.

All 50 states and the District of Columbia signed the May 2022 settlement, which was led by James.

Consumers eligible for restitution payments do not need to file a claim, the New York attorney’s general office. They will be notified by an email from Rust Consulting, the settlement fund administrator, and receive a check automatically.

Checks will be mailed starting in the coming week, with the payments expected to be received throughout May.

The amount paid to eligible consumers ranges from $29 to $85 — depending on the number of tax years they qualify for.

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said. “We are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes.”

At the time of the May 2022 settlement, James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the free, federal services they qualified for — and toward its own commercial products instead.

Under the terms of last year’s settlement, Intuit Inc. agreed to suspend TurboTax’s “free, free, free” ad campaign. According to documents obtained by ProPublica, Intuit executives were aware of the impact of advertising free services that were actually not free for everyone.

“The website lists Free, Free, Free and the customers are assuming their return will be free,” an internal company PowerPoint presentation said, according to ProPublica. “Customers are getting upset.”

Representatives for Inuit have said the company “admitted no wrongdoing” in the agreement — and that the company “agreed to pay $141 million to put this matter behind it and made certain commitments regarding its advertising practices.”

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