Attorney General Raoul leads coalition urging court to uphold FTC’s ban on deceptive TurboTax advertising
Chicago – Attorney General Kwame Raoul, alongside District of Columbia Attorney General Brian Schwalb, led a coalition of 22 attorneys general in filing a brief supporting a Federal Trade Commission (FTC) order that bars Intuit, the maker of TurboTax, from deceptively advertising free tax preparation software when its services were not actually free for many consumers.
In a brief filed in Intuit v. Federal Trade Commission, Raoul and the attorneys general argue that the U.S. Court of Appeals for the 5th Circuit should reject a petition filed by Intuit challenging the FTC’s order.
“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. The FTC’s decision played an important role in holding Intuit accountable for its deceptive conduct and must be upheld,” Raoul said. “I will not stop working to hold companies accountable for engaging in deception simply to increase product sales at the expense of Illinois residents.”
Intuit’s conduct has been subject to both federal and state investigations. In 2022, Raoul and a bipartisan coalition of 50 states secured a $141 million settlement from Intuit that resolved state investigations into claims that Intuit deceptively marketed and advertised TurboTax. In 2023, following a similar investigation, the FTC issued a cease-and-desist order requiring Intuit to stop advertising products as free unless they are free to all consumers. Intuit now seeks to overturn the FTC’s order.
In the brief, Raoul and the coalition argue that the court should uphold the FTC’s order against Intuit because:
- **Intuit harmed millions of Americans:** The brief describes how Intuit manipulated search results to lure consumers into paying for tax prep software even if they were eligible to file their taxes for free as part of a program for active duty servicemembers, veterans, or low-income taxpayers. Intuit made millions of dollars in profits from low-income taxpayers and military families who would have been eligible to file their taxes for free but instead paid Intuit to file taxes. Intuit also deceived millions of consumers by running a multi-year nationwide advertising campaign that repeatedly and falsely depicted TurboTax as being free when it was not free for most consumers.
- **The FTC correctly applied rules protecting consumers:** Intuit now claims the FTC made legal errors when applying rules against deceptive business practices. Raoul and the attorneys general disagree, arguing that the FTC correctly applied basic principles of consumer protection law, including that disclosures on advertisements for “free” items should be clear and conspicuous.
- **State and federal consumer protection enforcers each have a role to play:** Intuit is also claiming that the FTC’s order should be overturned because it is unnecessary due to Intuit’s settlement with the multistate coalition. Raoul and the coalition explain this is incorrect because the order bars Intuit from engaging in a wide range of misleading practices, and there are differences between the settlement and the FTC order.
Joining Raoul and Schwalb in filing the brief are attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey New York North Carolina Oregon Pennsylvania Rhode Island Washington Wisconsin