The Federal Trade Commission (FTC) has lodged a complaint against H&R Block, a prominent tax company, accusing it of deceptive marketing practices.
The FTC alleges that H&R Block falsely advertised its products as "free" and erased customers' tax data when they attempted to switch to less expensive online services.
Samuel Levine, the director of the FTCs Bureau of Consumer Protection, criticized H&R Block's online products, stating, "H&R Block designed its online products to present an obstacle course of tedious challengers to consumers, pressuring them into overpaying for its products." He further warned that companies employing coercive techniques detrimental to consumers should anticipate action from the FTC.
The FTC's administrative complaint suggests that H&R Block's online tax filing products have misled consumers into purchasing higher-priced items for more complex tax filing, despite the fact that most people do not require such services. The company has been accused of failing to provide clear explanations about which products cover specific forms, schedules, or tax situations, leading customers to start their tax filing process in more expensive and unnecessary ways.
The complaint further alleges that when consumers realize they don't need the more expensive products, H&R Block forces them to navigate a "series of time-consuming challenges" to downgrade to a cheaper option. Moreover, the system deletes all the tax data that the user had previously entered, a process that many users have described as "frustrating and time-consuming."
The FTC's filing contrasts this with the upgrade process, where consumers' data is seamlessly transferred to the more expensive product instantly. The FTC also accuses H&R Block of engaging in deceptive marketing "for years," falsely claiming that its tax services are free, even though many consumers are ineligible for the no-cost products.
The FTC files administrative complaints when it has reason to believe that a law has been or is being violated and it is in the public interest. The complaint against H&R Block, which is similar to a lawsuit, will be tried in a formal hearing before the FTC's administrative law judge.
The Verge reported that the commission, currently composed of Democrats, voted 3-0 to issue the complaint against H&R Block. H&R Block, when contacted by The Hill for a comment, responded that there are "multiple mechanisms" for customers to downgrade "while ensuring the preparation of accurate tax returns."
Login