By David Shepardson and Jasper Ward
WASHINGTON (Reuters) -The U.S. Federal Trade Commission said Friday it filed a complaint accusing H&R Block (NYSE:HRB) of deceptively marketing its online tax-filing software as free when that is not true for many consumers.
The FTC also alleged the company deleted consumers’ tax data and required them to contact customer service when downgrading to more affordable products.
The FTC said H&R Block's TV ads and promotions indicated consumers could file their tax returns for free while including language - sometimes in fine print - that the free offer only applied to simple returns.
The ads did not explain what a simple return was, and the company has changed the definition of the term "multiple times in recent years," the commission said, saying H&R Block was aware of consumers' frustration and confusion with the ads.
“H&R Block designed its online products to present an obstacle course of tedious challenges to consumers, pressuring them into overpaying for its products,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
On H&R Block's website, it advertises alternatives to the free version that cost from $35 to $85 for a federal return. The FTC is not seeking any civil penalties.
H&R Block said in a statement it believes "we provide our clients with a great deal of value, unmatched tax expertise, and fair and transparent pricing." The company added it has offered a free, do-it-yourself "filing option for more than 20 years to help millions of Americans file their taxes."
Last month, the FTC barred TurboTax software maker Intuit (NASDAQ:INTU) from advertising or marketing services as free when many consumers were in fact ineligible, saying the company had engaged in deceptive practices.
Intuit said it would appeal. In 2022 it paid $141 million in restitution over similar charges.