The Department of Financial Services of New York has launched an investigation into popular tax preparation services including TurboTax, which was developed by Intuit, and H&R Block. According to their investigation, these services may have purposefully hidden free tax programs from qualifying customers using deceptive coding techniques and Google Ad strategies.
A total of four tax preparation software companies received subpoenas for similar alleged offenses at the beginning of this month. Mainly, investigators demanded information regarding the programs that were marketed as ‘free’ for users who earn under $66,000 in yearly income.
News of the scheme came to light as users reported being unable to locate the free services being offered. When users signed on to utilize the tax preparation services they were often automatically directed to more costly programs. According to the investigation, many consumers requested refunds after being directed to the more expensive versions of the service but were lied to about their eligibility in an effort to disqualify them from their desired refund.
The Intuit-owned TurboTax service is suspected to have deliberately developed a Google Ad strategy designed to block the Free File program information page from appearing during certain Google search terms. Investigators state that the Google Ad strategy was supplemented by code that was designed into the platform to steer users away from the Free File pages. If the evidence gathered supports the alleged offenses, it would mean that a substantial amount of users who qualified for free services were pushed into paid services as a result of the marketing scheme.
Intuit, H&R Block, Tax Slayer, and Drake Software, which developed 1040.com, were all served subpoenas for offenses related to deceitful marketing strategies, and will have until May, 30th 2019 to respond. An Intuit spokesperson stated, “we will be cooperating with the agency’s review.”. Meanwhile, an H&R Block spokesperson stated, “we review and respond to all subpoenas we receive.”.
The Department of Financial Services in New York has led many notable investigations regarding financial fraud, including cases involving Deutsche Bank and Western Union.
To learn more about this case or other types of financial fraud, visit the Newman & Shapiro Whistleblower Help Center and blog!