Mich. (WNEM) – Attorney General Dana Nessel announced Wednesday that she had obtained more than $3.5 million from Intuit Inc., the owner of TurboTax, for deceiving customers into paying for services that should have been free.
Intuit will pay $141 million in compensation to more than one million customers who were wrongly charged, according to a multi-state settlement.
The planned $3.5 million will go to 115,000 affected consumers in the state.
While paying the restitution money, Intuit will also suspend its “Free, Free, Free” ad campaign.
The agreement was signed by all 50 states and the District of Columbia.
“This agreement is a united, bipartisan approach to ensuring that our consumers are protected from deceptive tax service tactics,” Nessel said. “I’m proud of the work our team has done to secure this money for the Michiganders. Those who will receive a refund have nothing to do, your payment will be sent directly to you.
The attorney general’s office opened an investigation after ProPublica reported that Intuit was using deceptive tactics to lure customers to their products and away from tax departments.
One of the two versions of TurboTax offered was the “TurboTax Free Edition”. The AG office says it’s only free for taxpayers with, as defined by Intuit, “simple returns.”
TurboTax began to commercially introduce a product called “Freemium”.
This specific product was only free for one in three US taxpayers. The AG office says the TurboTax Free File product was free to 70% of US taxpayers.
This multi-state investigation revealed that Intuit had engaged in several unfair and deceptive business practices limiting customers of the IRS Free Files Program.
The Inuit used confusing similar names for the two products, according to the AG’s office.
The company withdrew from the IRS Free File program in July 2021. Approximately $2.5 million of the $142 million returned will be used for administrative costs.
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