H&R Block under scrutiny for unfair practices

The Federal Trade Commission is taking action against tax preparation company H&R Block for unfairly deleting consumers’ tax data and requiring them to contact customer service when they downgrade to more affordable online products, and deceptively marketing their products as “free” when they weren’t free for many users.

Commission Director Samuel Levine said the company designed its online products to present an obstacle course of tedious challenges to consumers, pressuring them into overpaying for its products. Specifically, when consumers choose to downgrade, H&R Block requires consumers to contact its customer support via chat or phone. Then, its system deletes all the tax data the consumers have entered, requiring them to start their tax return from scratch, creating a significant disincentive to downgrading. This stands in contrast to the upgrade process, where consumers’ data seamlessly moves to the more expensive product instantly.

In addition, the complaint also alleges the company has engaged in deceptive advertising for years, marketing its online tax preparation services as “free” when many consumers are not eligible to use the company’s free products.