AZ attorney general joins court brief vs. TurboTax's 'deceptive' advertising

Arizona Attorney General Kris Mayes is part of a court brief against TurboTax that alleges the software brand exploited millions of consumers with advertising falsely claiming free services.

Mayes and 21 other attorneys general filed the brief to the 5th U.S. Circuit Court of Appeals to support the Federal Trade Commission's 2023 order barring TurboTax maker Intuit from advertising tax preparation software services as free, according to a news release from the AG's Office. Intuit is appealing the FTC's order the because it does not apply to all TurboTax users, the news release noted.

In 2022, 50 states and the District of Columbia won a $141 million settlement from Intuit for claims the company deceptively marketed and advertised TurboTax, the office added."Intuit's deceptive practices have harmed millions of consumers, particularly low-income families and members of the military who were misled into paying for services that should have been free,” Mayes said in a statement. “Upholding the FTC’s order is essential to protecting Arizonans and ensuring that companies are held accountable for false advertising."

The brief, the AG's Office said, argues Intuit made millions of dollars in profits while it "harmed millions of Americans" by manipulating search results to "lure" customers into paying for TurboTax services even if filing taxes would have been free as part of a program for those who were active-duty military, veterans or low-income. The AG's Office said in the news release that Intuit "deceived millions" by running a nationwide ad campaign depicting TurboTax as free when most had to to pay.

The attorneys general brief rebuts Intuit's argument that the FTC made legal errors in last year's order, the AG's Office press spokesperson explained. The brief contends the FTC correctly applied both basic consumer protection law principles and that online transactions are part of a rule banning businesses from using deceptive claims.

The brief, according to the AG's Office news release, also pushes back against Intuit's argument that the FTC's order should be overturned because of the company's multistate settlement. The brief maintains that the order keeps Intuit from "misleading" practices and requires specific language in ads, according to the press release. The brief also argues that state and federal consumer protection enforcement is designed to be complimentary and both are commonly enforced, the AG's Office noted.

The coalition of attorneys general on the brief is led by District of Columbia Attorney General Brian Schwalb and Illinois Attorney General Kwame Raoul.

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