The Federal Trade Commission sued the tax preparer, claiming unlawful practices
of ConsumerAffairsThe Federal Trade Commission has finalized an order requiring significant changes to tax preparer H&R Block's operations for the upcoming 2025 tax filing season.
The settlement, resulting from a complaint filed in February 2024, addresses allegations that the tax preparation giant engaged in unfair and deceptive practices, including obstructing consumers from downgrading to cheaper products and misleading claims about "free" tax filing services.
Central to the FTC's complaint was the assertion that H&R Block required consumers who wanted to switch to a less expensive product to contact customer service, a process that was both cumbersome and unnecessary. Additionally, the company was accused of unfairly deleting users' previously entered data and making deceptive claims regarding its "free" tax filing options.
Under the terms of the settlement, H&R Block is required to pay $7 million, which will be used to compensate affected consumers. Moreover, the company must implement several operational changes aimed at enhancing consumer experience and transparency.
By February 15, 2025, H&R Block is obligated to provide automated means, such as chatbots, for consumers to downgrade their products, eliminating the need for direct interaction with customer service representatives.
Looking ahead
Looking ahead to the 2026 tax season, H&R Block must also end the practice of completely erasing consumers' previously entered information when downgrading. Instead, the company is required to ensure that users can seamlessly return to the same point in their tax filing process as before the upgrade, thereby saving time and effort.
Furthermore, the company must offer a clear and easily accessible option for downgrading, independent of live customer service interactions.
The settlement also stipulates that H&R Block must clarify in its advertising the percentage of taxpayers eligible for "free" products or disclose that the majority do not qualify, addressing concerns over misleading advertising.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-08 17:53:46
