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. anita fasulo says:

    I used turbo tax for two years thinking i was doing the right thing then found out i was getting riped off i spent the money to buy it and not getting the return i should have

  2. gwen lamb says:

    i’ve seen tubo class actions suits for every state except florida. we floridians were taken by H&R block charging large fees for instant returns that we didn’t get. We need a class action suit for florida can you help?

  3. Androcles Davis says:

    I previously filed a claim and I think I put we used Turbo Tax starting in 2010 but we started using it in 2009. Could you please correct this on my claim form?

  4. michelle smith says:

    I have used Turbo tax.

  5. sharona herskovits says:

    I use turbo tax every year and feel that it is too expensive

  6. monty waits says:

    I’ve used Turbo Tax the past few years,now I’ll get a little return from them!

  7. Jennifer Fotovat says:

    I have used turbo tax for years and always have been charged too much!

  8. Erika Cook-Batiste says:

    Used Turbo Tax and always was forced to pay when I needed to print my taxes etc

  9. PAMELIA AUSTIN says:

    turbo alway over charge there clients

  10. PAMELIA AUSTIN says:

    I HAD ALWAY USE TURBO TAX ON LINE FOR THE LAST 7 YEARS I FELT LIKE THEY WERE ALWAY OVER CHARGER

    1. Stephanie says:

      Do you happen to know when the checks would be sent out to us? I haven’t received an e-mail or anything about this since I sent my form in.

      1. felix says:

        Stephanie, i want to know the same.. i sent my claim in.. still no word on when payments will be dispersed.

        1. stacey says:

          I still havent received anything either. Wondering the same thing…

          1. Fitzgerald says:

            I claimed before the deadline and email them when there going to disbursed but didn’t get an answer ????

      2. info4u says:

        This is in response to your message pertaining to TurboTax Class Action.

        The court did grant its final approval of the settlement.

        We are currently in the process of reviewing roughly 350,000 filed claims. This process is expected to be a rather lengthy one, given the class size, and checks will be mailed out upon completion.

        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 reviewed.

        At this time, we have no set-in-stone date for fund disbursement but we are anticipating checks to go out soon after the claims review process is completed which should be within the next 8-10 weeks or so. Please note that this time-frame is a rough estimate. Please get back to us as the time comes closer and we may be able to give you a more accurate date regarding checks.

        If you have any additional questions, you may contact us in writing at the address found on the website, by e-mail through the contact section of our website at http://www.turbotaxadmin.heffler.com.

        Sincerely,

        TurboTax Class Action
        Heffler Claims Group

        1. LAURA GALVAN says:

          I also used Turbo Tax but never heard about the lawsuit. Am I able to be part of the lawsuit?

        2. Mike says:

          Can you please provide an update as to when the claims review process will be completed and disbursements sent out?

        3. Steve says:

          Is there any word on when the checks will be sent out?

        4. roxanne van dorpe says:

          would really like to know when i will receive my check. thank you.

        5. tyrone bullock jr says:

          I didn’t receive anything either,only thing i received was a few emails saying ill get something in the mail in a few weeks. That was 2 months ago, everything will be ok if they replied back to people e-mails to let them know what’s going on.

      3. kinyetta purvis says:

        I was sent a response via email from the company handling the processing of the claims and this is what the said “The Settlement Administrator is processing all of the claims that were received. The claim payments are estimated to take place in September 2014.”

        1. Jamie says:

          Has anyone heard anything more about the checks?

          1. Jennifer E says:

            Just got my $17.87 check today. And I have used Turbotax every year since 2003.

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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.