Sarah Mirando  |  October 7, 2013

Category: Consumer News

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TurboTax class action settlementA California federal judge has granted final approval to a $6.55 million class action lawsuit settlement resolving claims that Intuit’s free TurboTax edition included exorbitantly high interest rates.

Arkansas residents Tasha and Fredierick Smith filed the TurboTax class action lawsuit in February of last year, claiming that Intuit violates the Truth in Lending Act (TILA) and California business and usury laws. They alleged that the “free” online edition of TurboTax charges illegal and outrageously high fees to consumers who choose to defer their TurboTax fees, opting instead to have the fees deducted from their tax refund.

In their class action lawsuit, the Smiths claim that the TurboTax webpage presents users with a variety of TurboTax products, including the so-called “Free Edition.” However, this edition of the software is not free because it charges $19.95 to file a state tax return. They allege that the “Free Edition” of TurboTax costs nothing unless a user wants to “file, e-file, or print your return,” in which case the user must purchase TurboTax federal and state products.

The plaintiffs claim that they had used TurboTax in 2009, 2010 and 2011. Each time, they deferred the $86.90 fee to use the software, opting to have the amount deducted from their tax refund. Allegedly, Intuit charged them $29.95 to have the fee deducted from their refund, more than 34 percent of the original usage fee. The Smiths claimed that Intuit failed to adequately disclose the fee for the “refund processing service” as a finance charge.

Initially, the plaintiffs argued that the $29.95 should be considered a refund anticipation loan and therefore should be subject to interest rate and finance charge disclosure rules. However, U.S. District Judge Edward J. Davila disagreed and dismissed this claim because TurboTax users never received any money from Intuit. Subsequently, the parties agreed to settle the class action lawsuit. Intuit has denied any wrongdoing but agreed to refund consumers under the terms of the class action settlement.

Earlier this year, Judge Davila granted preliminary approval to the Intuit TurboTax class action settlement. After a fairness hearing was held on September 27, Judge Davila granted final approval to the class action settlement on October 1. Class Members include anyone who used Intuit’s TurboTax online and utilized the “refund processing service” from January 12, 2008 until May 28, 2013. The agreement will incorporate a second class action lawsuit that is currently pending against Intuit in state court.

To be eligible to receive a cash award from the class action settlement, Class Members must submit a valid Claim Form to the Settlement Administrator on or before October 28, 2013.

Detailed instructions on how to file a claim for the TurboTax class action settlement can be found here in our Open Class Action Lawsuits section.

Attorneys for the plaintiffs include Hank Bates of Carney Williams Bates Pulliam & Bowman PLLC; Gillian Wade and Isaac Miller of Milstein Adelman LLP; Richard M. Golomb, Ruben Honik and Kenneth J. Grunfeld of Golomb & Honik PC; and Brian T. Ku and M. Ryan Casey of Ku & Mussman PA.

The TurboTax Class Action Lawsuit Settlement case is Smith v. Intuit Inc., Case No. 12-cv-00222, in the U.S. District Court for the Northern District of California.

UPDATE 1: Some Top Class Actions viewers have reported they received the following update from Heffler Claims Group, the Settlement Administrator for the TurboTax class action settlement: “We are currently in the process of reviewing over 360,000 filed claims. Your patience during this process is appreciated. Checks will be mailed out upon completion of the claims review process.The amount that each claim will receive via the settlement fund has not yet been determined. This determination usually occurs once all claims have been finalized. At this time, we have no set date for fund disbursement, but we are anticipating checks to go out soon after the claims review process is completed. Please feel free to get back to us in the future.” More info: www.turbotaxclassaction.com

UPDATE 2: Payments from the TurboTax class action settlement were mailed the second week of November. Learn more: https://topclassactions.com/lawsuit-settlements/lawsuit-news/43855-turbotax-heel-homeopathic-class-action-settlements-pay/

 

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122 thoughts onJudge Approves TurboTax Class Action Lawsuit Settlement

  1. Margaret Crockett says:

    We would definitely qualify, but we had no idea this class action was in place.

  2. Lynn Yoch says:

    I have used Turbo Tax for several years now and have always been happy. but the last 2 years it seems like it has gotten very expensive. I paid 49.95 for the program then another fee to file electronically and a fee to have it directly deposited. Our 2014 taxes were filed March 8, 2015 and we still don’t have our refund. so tired of this.

  3. trina says:

    I submitted one claim was told last month i didn’t qualify I’ve used tt since 2001 and have always had fees taken from check anyone elsE having this problem

  4. lou2u8 says:

    Imagine waiting a year for $8.94. Only in America.

  5. cjd1467 says:

    $5.96 received yesterday in MA.

  6. Top Class Actions says:

    UPDATE 2: Payments from the TurboTax class action settlement were mailed the second week of November. Learn more: http://topclassactions.com/lawsuit-settlements/lawsuit-news/43855-turbotax-heel-homeopathic-class-action-settlements-pay/

  7. Kat says:

    $8.94 in Texas

  8. brandon Hamilton says:

    I received my check yesterday for 2.98 cents

  9. It is me again says:

    17.87 ?

  10. Amy White says:

    I received a check today in Central Florida from the Turboxtax settlement. There must have been many, many claims. I have used Turbotax for the last ten years, and my check was only $17.87 !

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Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.