On November 12, the FTC released a proposed settlement agreement containing a consent order against a tax preparation company and its subsidiaries regarding certain practices that allegedly violated the FTC Act.
The proposed settlement stemmed from the administrative complaint that the FTC filed against the company earlier this year. As previously covered by InfoBytes, the FTC alleged in its redacted administrative complaint that the defendant unfairly pushed consumers into paying for more expensive tax preparation products. The FTC further alleged the company made it unnecessarily difficult to downgrade the consumer’s tax preparation plan, both by requiring the consumer to first speak with a representative and by requiring the consumer to re-input the data if the consumer chooses to downgrade to the lower-priced product.
The company, while neither admitting nor denying the allegations, agreed to enter into a consent order to resolve the issue. Upon acceptance of the consent order, the company must: (i) pay $7 million in consumer redress; (ii) eliminate the requirement for consumers to contact customer service to downgrade their online tax products; (iii) eliminate the practice of deleting consumer information upon downgrading by January 15, 2026; and (iv) notify consumers who are upgrading that if they later choose to downgrade, their information will not be saved and they will have to start over until the deletion requirements are eliminated.
The agreement will be open for public comment for a period of 30 days following publication of the consent agreement package in the Federal Register, after which the FTC will decide whether to make the proposed consent order final.
