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FTC alleges H&R Block wiped out tax data of filers looking for less pricey option

The Federal Trade Commission (FTC) has accused H&R Block of deceptive practices in its marketing of tax-preparation products. According to the FTC, H&R Block advertises its online tax-filing products as free but employs tactics that pressure customers into purchasing more expensive services. Specifically, the FTC alleges that H&R Block’s online software leads users to upgrade to costlier options designed for complex tax filings, even if they don’t require the additional features.

When customers attempt to downgrade to a cheaper option, they encounter hurdles such as having to contact customer support, and their entered tax data is deleted, forcing them to start over. In contrast, data seamlessly transfers to more expensive products. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, criticized H&R Block’s approach, stating that it creates obstacles for consumers and pressures them into overpaying.

Additionally, the FTC claims that H&R Block has engaged in deceptive advertising by promoting its online tax preparation services as free when many customers end up having to pay. H&R Block defended its pricing, asserting that it offers fair and transparent pricing and allows customers to downgrade to less expensive options while ensuring accurate tax returns.

This accusation against H&R Block follows a recent ruling by the FTC against Intuit, the maker of TurboTax, for deceptive advertising practices. Intuit is appealing the ruling, which prohibits it from advertising TurboTax as free, as most users are required to pay for the software. The FTC’s order against Intuit did not include a monetary penalty.

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