FTC Files Complaint Against H&R Block for Deceptive Marketing, Data Deletion

The free offer only applied to 'simple returns,' which the FTC said wasn't explained in advertisement

The Federal Trade Commission filed an administrative complaint against tax-preparation serviceH&R BlockHRB-0.35%decrease; red down pointing triangle, alleging the company used deceptive marketing and unfairly deleted consumers' tax data.

The FTC's complaint specifically alleges that H&R Block customers had to contact the company by chat or phone in order to downgrade to a less expensive tax-filing product, making the downgrade more time consuming. According to the FTC, consumers can upgrade their product without contacting the company's customer service.

The FTC alleges the company would delete all tax data customers had entered before they requested the downgrade, requiring them to start from the scratch. The FTC said data transfers seamlessly when consumers upgrade to more expensive products.

The FTC complaint also alleges H&R Block marketed its services as free in advertisements and online promotions, when in fact many consumers were not eligible to use free products.

The company's free offer only applies to "simple returns," which the FTC said wasn't explained in advertisements and has had a shifting definition in recent years.

Question Group One:

• What is deceptive marketing and deceptive advertising?
• Why does the U.S. have laws addressing this type of marketing?
• Who could be harmed by deceptive advertising practices?

Question Group Two:

• What is the FTC?
• What are its areas of authority?
• Why could it be involved in deceptive marketing practices cases?

Question Group Three:

• What are the details of the FTC's complaint against H&R Block?
• What are the legal violations of these alleged actions?

Question Group Four:

• Why might H&R Block have adopted these pricing and marketing strategies?
• What other ways could they successfully market their products to avoid these types of legal challenges?

Question Group Five:

• What is a legal complaint?

Question Group Six:

• Have you prepared and filed your tax returns using online tax software?
• Have you encountered any difficulties or had any complaints?
• After reading about this case, would you complain to the company and/or the FTC? Why or why not?