FTC says ALJ order bars Intuit from engaging in ‘deceptive practices’ in future

In an initial decision announced today, the Federal Trade Commission’s Chief Administrative Law Judge, or ALJ, D. Michael Chappell, ruled that Intuit, the maker of the TurboTax tax filing software, “engaged in deceptive advertising in violation of Section 5 of the FTC Act” and deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible, the FTC announced. “In ruling in favor of complaint counsel-FTC staff in the Bureau of Consumer Protection-the ALJ also found that there is a ‘cognizant danger of a recurring violation’ by Intuit, and issued an order requiring the company to cease-and-desist from engaging in the deceptive practices alleged in the complaint. Under the terms of the ALJ’s order, which can be appealed to the full Commission, Intuit is ‘prohibited from engaging in deceptive practices in the future.’ It also is barred from representing that any good or service is free, unless: 1) it is free for all consumers; 2) it clearly and conspicuously discloses any terms that would limit the offer and might be misunderstood by consumers; and 3) if the good or service is not free ‘to a majority of U.S. taxpayers,’ this also must be disclosed in a clear and conspicuous manner. The order also prohibits specific misrepresentations by Intuit regarding the tax preparation and filing services it offers, requires that the order be distributed to relevant parties for the next 20 years, and include strict recordkeeping and reporting provisions to ensure the company’s compliance,” the FTC stated.