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October 17, 2013 / Scott Tillett

TurboTax Consumer Class Action Lawsuit Settles for $6.55 Million

On October 1, 2013, a California federal judge granted final approval of the class action settlement in a consumer lawsuit against Intuit for charges associated with its online tax preparation software, TurboTax. In January 2013, plaintiffs Tasha and Fredierick Smith filed the class action lawsuit alleging that Intuit engaged in unfair and fraudulent business practices in violation of the Truth in Lending Act (“TILA”), California’s Unfair Competition Law, and California’s False Advertising Law.

The complaint alleged that Intuit’s TurboTax software offered a Refund Processing Option (“RPO”), which allowed those who used the tax filing software to defer payment of the TurboTax service fees, which were later deducted from the tax refund for an additional fee. The plaintiffs alleged that the $29.95 Refund Processing Service Fee they paid was a finance charge Intuit assessed against their tax return for essentially a two-week loan of the $86.90 tax preparation and filing fee associated with use of the TurboTax software. The Smiths alleged that Intuit failed to disclose the Refund Processing Service Fee as a finance charge, in violation of TILA.

The Smiths filed the class action lawsuit on behalf of all persons who used the TurboTax online filing software and selected to defer payments through the RPO after January 12, 2008. The complaint sought injunctive relief, enjoining Intuit from continuing to engage in acts violating TILA and California’s Unfair Competition and False Advertising Laws, restitution, compensatory damages, interest, and attorneys’ fees.

Despite denying any wrongdoing, TurboTax agreed to refund consumers under the terms of the settlement, which was approved by the court earlier this month. To be eligible to take part in the class action settlement, consumers must have used the TurboTax online software and utilized the RPO service between January 12, 2008 and May 28, 2013, and must submit a valid claim form to the settlement administrator on or before October 28, 2013.

If you or someone you know has paid hidden and/or illegal fees or purchased a product based upon false advertising, you may be entitled to relief. Please call Khorrami Boucher Sumner Sanguinetti, LLP for a confidential consultation.

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