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AG Nessel secures $3.5M for residents deceived by TurboTax

FILE - This Thursday, Feb. 22, 2018 photo shows a display of TurboTax software in a Sam's Club...
FILE - This Thursday, Feb. 22, 2018 photo shows a display of TurboTax software in a Sam's Club in Pittsburgh.((AP Photo/Gene J. Puskar, File))
Published: May. 4, 2022 at 8:27 PM EDT
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Mich. (WNEM) - Attorney General Dana Nessel announced Wednesday she has secured 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 restitution to over a million customers who were unfairly charged, according to a multistate agreement.

The projected $3.5 million will go to 115,000 consumers affected in the state.

While paying the restitution money, Intuit also will suspend their “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 our consumers are protected against deceitful tactics related to tax services,” Nessel said. “I’m proud of the work our team did to secure this money for Michiganders. Those who will receive a reimbursement do not need to do anything—your payment will be sent to you directly.”

The Attorney’s General office started an investigation after ProPublica reported Intuit was using deceptive tactics to lure customers to their products and away for tax services.

One of the two versions of TurboTax offered was the “TurboTax Free Edition.” The AGs office says this is only free for taxpayers with as defined by Intuit “simple returns.”

TurboTax started showing commercially a product called “Freemium.”

This specific product was only free for one out of three United States taxpayers. The AGs office says the TurboTax Free File product was free for 70 percent of American taxpayers.

This multistate investigation discovered Intuit performed multiple unfair and deceptive trade practices limiting customers in the IRS Free File Program.

Inuit used confusing similar names for both products, according to the AGs office.

The company withdrew from the IRS Free File program in July 2021. About $2.5 million of the $142 million restitution money will be used for administrative costs.

The Assurance of Voluntary Compliance for this investigation can be found here.