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A 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
Just a waste of time. The lawyers will benefit most. The exploited will continue to suffer. Turbo Tax will collect their monies back during tax time. The only beneficiaries are the Lawyer.
I have used Turbo Tax a number of years, how will you receive compensation.
I used the TTax software for multiple years too, but I saw on another blog that once the lawyers and plaintiffs are awarded their ligitation fees/awards the rest of us could get as little as $10. And if this is true this will be the LAST class action suit that I participate in. It’s not worth it when the only people who actually benefit are the lawyers.
Really? It’s not worth it for you to write your name, address and answer a few questions? Are you seriously that effing lazy? You must be an Obama voter..if you weren’t too damn lazy to vote.
YES!!!!!! I DID VOTE!!!!! FOR OUR!!!!! PRESIDENT!!!!! HE WERE VOTED IN OFFICE 2!!!!!! TIMES !!!!! NO!!!! I AM NOT LAZY, YOU MUST BE EFFING MENTAL!!!! TO WRITE SOMETHING LIKE THAT!!! GO TO CHURCH!!!!
Why is anyone surprised at what the lawyers are getting. Lawyers always get 50 to 60 % of all lawsuits. That’s why they are so stinking rich and why they chase ambulances and fraudulent Companies. To all the claimants, be patient. If you ever get anything, consider yourself lucky and by all means don’t spend any of this money before you get it.
Listen there isn’t anything wrong with wanting to know about when will the checks be issued. Its not very nice to take advantage of people and their money,someone just caught on to it. TurboTax is a great service. If their fees are going to be $30 or $70 or $100 to file they need to be clear from the get go. I would still pay it because its not that much money. I just would like to be aware of the fact that the fees are more than the should be, right away. Being mislead is the issue.
Once everything is finalized how and when will we receive our money?
I sent an email to turbotaxclassaction.com, and was notified that there are no dates yet for the checks to be mailed out.
I see others have asked the same question how do you track a refund? The lawsuit is over. I have my claim number. Thank you.
I filed back in July I think when ever you sent me an email and have not reserved anything no money or responce
I have used turbo tax for 3 years. First it would say 29.95, but I choose to pay fees out my return than it jumped up to like 90 bucks. I had always thought that it was hoax. I thought it was processing fees but the service they use to transmit are money takes a fee to. So it couldn’t been that. Jus give me the over due amount for each year
If you have any questions about the Settlement, visit the Settlement website at http://www.turbotaxclassaction.com or call the toll free number 1-888-980-9394. You may also send questions to the Settlement Administrator through the ‘Contact Us’ section of the Settlement website or by mail addressed to TurboTax Class Action, Settlement Administrator, c/o Heffler Claims Group, P.O. Box 220, Philadelphia, PA 19105-0220.
NOTE: DO NOT CALL OR WRITE THE COURT, THE COURT CLERK’S OFFICE, INTUIT, OR INTUIT’S COUNSEL FOR MORE INFORMATION.