FTC sues H&R Block for deceptive marketing, deletion of tax data to downgrade

The Federal Trade Commission (FTC) falsely markets products as “free” when they are not, and steals the tax data of customers trying to downgrade to more affordable online services. A complaint has been filed against tax company H&R Block over the alleged deletion.

“H&R Block designed its online products to present consumers with a boring challenger obstacle course and to overpay for its products,” FTC Consumer Protection Director Samuel Levin said in a statement. Ta. “Today’s action shows that companies that use coercive techniques that harm consumers can expect to hear from the FTC.”

The FTC filed an administrative complaint alleging that H&R Block’s online tax filing products steer consumers toward more expensive products for more complex tax filings, even when most people don’t need them.

The company doesn’t clearly explain “which products cover specific forms, schedules, or tax situations,” leading customers to pay their taxes in more expensive and unnecessary ways.

Once a consumer realizes they no longer need the more expensive product, the company puts them through a “series of time-consuming challenges” to downgrade to a less expensive product, according to the complaint.

Consumers also had to contact the company’s customer support via online chat or phone to downgrade, which many users complained was a “frustrating and time-consuming” process. The system will then delete all tax data entered by the user.

“This is in contrast to the upgrade process, where a consumer’s data is immediately and seamlessly transferred to a more expensive product,” the FTC filing states.

The FTC also said the company has engaged in deceptive marketing “for years” by claiming its tax services are free, even though many consumers do not qualify for free products. claims.

The commission noted that it will file administrative complaints when it has “reason to believe” that the law has been or has been violated and is in the public interest.

Compliance is similar to a lawsuit, but it is heard under a formal heading before an administrative law judge at the FTC.

The committee, currently made up of Democrats, voted 3-0 to issue a complaint against H&R Block, The Verge reported.

The Hill reached out to H&R Block for comment, but the company told The Verge it has “multiple mechanisms” for customers to downgrade “while ensuring accurate tax return preparation.”