H&R Block Agrees to $7 million FTC Settlement Over Tax Filing Products

The Federal Trade Commission (FTC) in Washington, on Aug. 6, 2024. Madalina Vasiliu/The Epoch Times

H&R Block, one of the largest tax preparation service providers in the United States, has agreed to pay $7 million to settle a lawsuit from the U.S. Federal Trade Commission (FTC), which alleged that the company had deceptively marketed its online tax filing products as free.

The FTC filed a lawsuit against H&R Block in February, accusing the company of deceiving consumers into believing they could file taxes online for free, despite many not being eligible for the free products.

The company allegedly used ads that claimed the free offer applied only to “simple returns,” but did not define the term “simple return,” according to the complaint.

The FTC said in a Nov. 12. statement that the settlement funds will be used to help consumers who have been affected by the company’s alleged unlawful practices.

As part of the settlement, the company must disclose in its advertising either the percentage of taxpayers eligible to use its free products or indicate that the majority of taxpayers do not qualify.

The complaint also alleged that H&R Block unfairly deleted consumers’ tax information and required them to contact customer service by phone or live chat when they downgrade to more affordable products.

It stated that the company also failed to provide clear instructions on the use of its products, leading many consumers to complete their tax returns with products that were more expensive than they needed.

Under the proposed settlement, the company is required to make changes to its business practices, including ending its data-deletion practice.

It also requires H&R Block to create an “easily noticeable and always available way” that allows consumers to downgrade products without having to contact customer service, starting on Feb. 15, 2025.

“American taxpayers who seek tax-filing help should be able to choose the services they need—and know the truth about how much they’ll pay,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the statement. “The FTC’s action today will help lower the stress and expense of tax season for millions of taxpayers.”

H&R Block did not admit or deny wrongdoing in agreeing to settle. In a statement, the company said it will continue to work with the FTC, and that its pricing is “fair and transparent.”

In an emailed statement to The Epoch Times, the company said it will continue to work with the FTC through the process.

An H&R Block spokesperson said the company has been providing customers with “fair and transparent pricing” for nearly 70 years.

“H&R Block prides itself in providing consumers with quality online tax preparation products, which has never been an issue in this matter,” the spokesperson said.

Reuters contributed to this report.

This report was updated with comment from H&R Block.