Intuit TurboTax Class Action Lawsuit
By Kimberly Mirando
According to the TurboTax class action lawsuit, customers visiting the TurboTax webpage are presented with various TurboTax Online products, including the “Free Edition.”
However, “the poorly named TurboTax Online ‘Free Edition’ is not free, for it requires additional fees (typically $19.95) to file a state return. According to Defendant’s website, ‘TurboTax Online is free until you decide to file, e-file or print your return.’ At that point, consumers must ‘purchase [the] TurboTax Online federal and state products,’” the TurboTax class action lawsuit states.
While Intuit prominently displays and aggressively markets its not-free “Free Edition,” it conceals from plain view what it calls its “Freedom Edition,” which provides actual free e-filing for both federal and state tax returns, the class action lawsuit says.
The TurboTax class action lawsuit also claims Intuit violates the Truth in Lending Act and California business and usury laws by charging “usurious,” “quadruple-digit interest rates” as fees for deferring payment to be taken out of users’ tax refunds. The class action lawsuit also claims Intuit violates federal and California law by not accurately disclosing the interest rates and finance charges for deferring payment of tax preparation fees.
For example, lead Plaintiffs Tasha and Fredierick Smith claim in the class action lawsuit that they used TurboTax’s online software in 2009, 2010 and 2011. Each time they deferred paying the $89.90 fee to use the software, and chose to have it deducted from their tax refund.
Intuit charged them another $29.95 to do this, more than 34 percent of the $89.90 fee, the Smiths claim. They received their refund from the IRS two weeks later, which means they “paid $29.95 for an approximate 14-day loan of $89.90,” the class action lawsuit states.
“The APR, properly calculated in accordance with TILA, was an exorbitant quadruple-digit interest rate. Such interest rates also violate California’s usury laws.”
The Intuit class action lawsuit is brought on behalf of all U.S. citizens who, after January 12, 2008, used TurboTax Online and received a Refund Processing Option payment facilitated by Intuit and Intuit’s fees were deducted from the deposit account established for the Refund Processing Option payment. It is seeking statutory damages, restitution, compensatory and treble damages, and injunctive relief.
A copy of the Intuit TurboTax Class Action Lawsuit can be read here.
The case is Smith v. Intuit, Inc., Case No. 12-cv-00222, U.S. District Court, Northern District of California.
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