FTC Finalizes Order with H&R Block Requiring Them to Pay $7 Million and Overhaul Advertising and Customer Service Practices for 2025 and 2026 Tax Seasons

The Federal Trade Commission finalized an order requiring the tax preparation company H&R Block to make a number of changes for the 2025 tax filing season in addition to longer-term changes. The settlement also requires the company to pay $7 million to be used to compensate consumers harmed by the company's unlawful practices.

In a complaint announced in February 2024, the FTC charged that H&R Block unfairly required consumers seeking to downgrade to a cheaper H&R Block product to contact customer service, unfairly deleted users' previously entered data and made deceptive claims about "free" tax filing.

The settlement requires H&R Block to make it easier for consumers to downgrade products and by eliminating its practice of completely deleting consumers' previously entered data upon downgrade. By February 15, 2025, the company is required to allow consumers to downgrade products using a chatbot or other automated means, instead of requiring them to call customer service or chat with a live customer service agent.

In addition to the $7 million payment, the settlement requires H&R Block, by the 2026 tax filing season, to stop completely deleting consumers' previously entered information. Specifically, when a consumer downgrades back to the product they upgraded from, H&R Block must ensure that the consumer returns to the same point in filing where they were when they upgraded, which will save consumers significant time and effort. H&R Block must also provide an easily noticeable and always available way for consumers to downgrade without having to call customer service or chat with a live customer service agent.

The settlement also requires H&R Block to disclose in its "free" advertising either the percentage of taxpayers who are eligible to use any "free" products or that the majority of taxpayers do not qualify.

After receiving three comments, the Commission voted 5-0to approve the final order and send responses to the commenters. Commissioner Andrew Ferguson issued a concurring statementjoined by Commissioner Melissa Holyoak.