Tuesday, February 27, 2024

CRIMINAL CAPITALI$M BAIT & SWITCH
H&R Block deceived users with ‘free’ online tax filing ad, feds say in lawsuit

Tanasia Kenney
Mon, February 26, 2024 

Tax preparer H&R Block “deceptively” pushed ads promising free online tax filings, according to the Federal Trade Commission.

Now, it’s the subject of a federal complaint.

The commission is suing the tax prep giant over claims it deleted users’ tax data when they opted for less-expensive products, forcing them to restart the filing process from scratch, per a Feb. 23 news release.

Further, H&R Block is accused of marketing its online filing products as “free” — though that wasn’t the case for many users, the FTC said.

“H&R Block designed its online products to present an obstacle course of tedious challenges to consumers, pressuring them into overpaying for its products,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release.

“Today’s action demonstrates that companies using coercive techniques that harm consumers can expect to hear from the FTC.”
‘Fair and transparent pricing’

H&R Block responded to the complaint, saying it provides filers with “unmatched tax expertise, and fair and transparent pricing.”

“The multitude of resources we offer to all filers via educational resources, free tools, and calculators, and The Tax Institute demonstrates our commitment to making filing your taxes more accessible and more transparent for all,” Dara Redler, chief legal officer for H&R Block, told McClatchy News in a statement.

In its complaint, the FTC accused H&R Block of forcing filers to pay for pricier products they didn’t need or that weren’t required for their particular tax situation.

Once users realized they didn’t need that particular product, H&R Block made it difficult to “downgrade” to a cheaper service, federal officials said.

 In this Feb. 14, 2018, file photo, H&R Block signs are displayed in Jackson, Miss. Congressional Democrats are accusing big tax preparation firms including Intuit and H&R Block of undermining the federal government’s upcoming electronic free-file tax return system, and are demanding lobbying, hiring and revenue data to determine what’s going on. 
(AP Photo/Rogelio V. Solis, File)

The complaint further alleged that customers looking to switch to a more budget-friendly option offered by H&R Block were required to call the company’s customer support line. All their tax information submitted up to that point was erased, the FTC said, and users were forced to restart the tax filing process.

“This stands in contrast to the upgrade process, where consumers’ data seamlessly moves to the more expensive product instantly,” according to federal officials.

What’s more, the FTC said H&R Block promised “free” online filing for users with simple returns but “has changed its definition of a ‘simple return’ multiple times in recent years.”

In a statement, Redler said H&R Block gives users the option to switch to a cheaper DIY Product “via multiple mechanisms while ensuring the preparation of accurate tax returns.”

It’s just the latest lawsuit against the tax prep company. In 2023, Missouri Attorney General Andrew Bailey sued H&R Block after it was accused of sharing Missourians’ sensitive tax data with tech giants, including Meta, the Kansas City Star reported.

More recently, the tax giant agreed to pay $141 million to settle claims it steered some users to upgrade to its paid tax filing service when they qualified for a free version offered to those who earned less than the IRS’s income limit, according to The Los Angeles Times.

H&R Block denied any wrongdoing in that case, the newspaper reported.

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