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Tax season is just around the corner, and many consumers will turn to Intuit’s popular TurboTax software to prepare and file their own taxes. A federal class action lawsuit filed in California may have these consumers thinking twice, however, claiming Intuit charges users for its so-called “free” online edition of TurboTax, and charges illegal and exorbitant fees to those who elect to defer their TurboTax fees to be taken out of their tax refund.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.
UPDATE 1: A class action settlement has been reached! Learn how to file a claim for the Intuit TurboTax Class Action Lawsuit Settlement.
UPDATE 2: A federal judge granted final approval to the Intuit TurboTax Class Action Lawsuit Settlement on October 1, 2013.
Update 4/24/14: 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
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103 thoughts onIntuit TurboTax Class Action Lawsuit
i have been using turbotax since the year 2000. I am able to read quite well and hence I was never “surprised” with charges.All fees were prominently displayed in my book. I agreed to the terms. therefore do not believe I nor anyone else is now entitled to $. they did not force anyone to use their product!.waaay too many people out for a free ride.if you don’t like them or their practices, go somewhere else. lots of other tax products out their.
I was also charged so much
I was also charged so much
I was also charged so much
I was also charged so much
I was also charged so much
I was also charged so much
You do not need to join the lawsuit everyone. The actual court proceedings are over and now they have to pay us back. You don’t join the suite its up to us now to claim the funds that were awarded to us by the courts. Here is the catch we need to tell as many people that we know about this because that is what will determine how much we are awarded. We will be awarded the number of times that we utilized Turbo Tax since the year 2008 up until 2012 divided by the number of people who file a claim to collect money and the amount of times they used the Turbo Tax Processing service. Example. If 2500 individuals used Turbo Tax 4 times that equals 10,000 times it was used and then that is divided by lets say 4 thats about $2500.00 thats the example.I divided by the number four because that is the number of times that I used Turbo Taxes since 2008. Now just think if there is 2500 others who used Turbo Tax five times and then that is multiplied then it keeps adding up. This is the catch. We have until October of this year to maximize our time and energy in getting the word out to Turbo Tax customers to file their claim. The more people to file the claim the more we are compensated. After October 30, 2013 all money left goes back to Intuit. They will initially pay us and then if more people file after we are paid we will receive another payment. The other thing is yes Turbo Tax spelled out what we were being charged and what fees were being accessed but that doesn’t make it right that we were accessed the fees even though we agreed and paid them. If we didn’t need our money fast or sooner than the normal delivery date of the IRS then we would not have utilized Turbo Tax so it was sort of a strong arm tactic. I’m just glad someone stood up for all of us. Thank you to Mr. and Mrs. Smith who decided that this should be investigated and sought legal advice in the matter.
you are dumb, the less people that sign up the more we get paid re read the agreement.
You do not need to join the lawsuit everyone. The actual court proceedings are over and now they have to pay us back. You don’t join the suite its up to us now to claim the funds that were awarded to us by the courts. Here is the catch we need to tell as many people that we know about this because that is what will determine how much we are awarded. We will be awarded the number of times that we utilized Turbo Tax since the year 2008 up until 2012 divided by the number of people who file a claim to collect money and the amount of times they used the Turbo Tax Processing service. Example. If 2500 individuals used Turbo Tax 4 times that equals 10,000 times it was used and then that is divided by lets say 4 thats about $2500.00 thats the example.I divided by the number four because that is the number of times that I used Turbo Taxes since 2008. Now just think if there is 2500 others who used Turbo Tax five times and then that is multiplied then it keeps adding up. This is the catch. We have until October of this year to maximize our time and energy in getting the word out to Turbo Tax customers to file their claim. The more people to file the claim the more we are compensated. After October 30, 2013 all money left goes back to Intuit. They will initially pay us and then if more people file after we are paid we will receive another payment. The other thing is yes Turbo Tax spelled out what we were being charged and what fees were being accessed but that doesn’t make it right that we were accessed the fees even though we agreed and paid them. If we didn’t need our money fast or sooner than the normal delivery date of the IRS then we would not have utilized Turbo Tax so it was sort of a strong arm tactic. I’m just glad someone stood up for all of us. Thank you to Mr. and Mrs. Smith who decided that this should be investigated and sought legal advice in the matter.
You do not need to join the lawsuit everyone. The actual court proceedings are over and now they have to pay us back. You don’t join the suite its up to us now to claim the funds that were awarded to us by the courts. Here is the catch we need to tell as many people that we know about this because that is what will determine how much we are awarded. We will be awarded the number of times that we utilized Turbo Tax since the year 2008 up until 2012 divided by the number of people who file a claim to collect money and the amount of times they used the Turbo Tax Processing service. Example. If 2500 individuals used Turbo Tax 4 times that equals 10,000 times it was used and then that is divided by lets say 4 thats about $2500.00 thats the example.I divided by the number four because that is the number of times that I used Turbo Taxes since 2008. Now just think if there is 2500 others who used Turbo Tax five times and then that is multiplied then it keeps adding up. This is the catch. We have until October of this year to maximize our time and energy in getting the word out to Turbo Tax customers to file their claim. The more people to file the claim the more we are compensated. After October 30, 2013 all money left goes back to Intuit. They will initially pay us and then if more people file after we are paid we will receive another payment. The other thing is yes Turbo Tax spelled out what we were being charged and what fees were being accessed but that doesn’t make it right that we were accessed the fees even though we agreed and paid them. If we didn’t need our money fast or sooner than the normal delivery date of the IRS then we would not have utilized Turbo Tax so it was sort of a strong arm tactic. I’m just glad someone stood up for all of us. Thank you to Mr. and Mrs. Smith who decided that this should be investigated and sought legal advice in the matter.