The Federal Trade Commission alleged this month H&R Block deliberately deleted data for customers who were seeking cheaper products.In an administrative complaint, the FTC alleged that when consumers want to downgrade, Block requires them to contact support via chat or telephone, a practice the FTC said Block has followed since as least 2014. The company’s computer system then deletes their tax data so they must start returns from scratch. By contrast, the complaint says those seek to buy more expensive services are presented a seamless path.
The agency also said Block advertised free services for which many filers do not qualify. The FTC has previously determined Intuit engaged in deceptive advertising in marketing its “free” services.
The FTC staff alleges Block’s online products lead customers to higher-cost apps for more complicated taxes, even though many consumers do not need additional forms and schedules. The complaint continues Block fails to explain what these additional documents are for.
When customers later realize they did not need or want those more expensive products, “H&R Block presented them with a series of time-consuming challenges when attempting to downgrade after already spending substantial time entering their tax information,” the complaint says.
The complaint also says the company’s television and online ads promote “free” filing, but often say only in fine print that the free offer is only for “simple returns”, which are not defined. The FTC says Block changed its definition of a “simple return” multiple times in recent years while being “aware of consumers’ frustration and confusion with these misleading advertisements.”
