In FTC parlance, an “unqualified” claim is one without conditions or restrictions while a “qualified” claim conveys limitations. The conclusion: “Respondent’s purported disclosures of the conditions and qualifications for the free online filing offer were typically inconspicuous, unclear, or otherwise insufficient to inform a reasonable viewer of the terms of the offer or to modify the dominant message of ‘free.’” Specifically, the ALJ found that “use of the phrase ‘simple returns’ is an ineffective disclosure because it fails to convey to consumers that they may not qualify in a manner that is consistent with TurboTax’s qualification criteria and does not cure the false impression that they can file for free with TurboTax.”Ĭonsider consumer perception before making unqualified claims. In rejecting the company’s claim, the ALJ looked at the purported disclosures’ wording, font size, font color, juxtaposition with other statements, location and length of time on the screen, placement at the end of some ads, and other relevant factors. In response to Intuit’s defense that its ads included purported disclosures that effectively modified its “free” claims, the Initial Decision put that argument under the microscope. It’s unwise to rely on a purported “disclosure” to correct a deceptive claim. It is a powerful magnet that draws the best of us against our will ‘to get something for nothing.’” As the ALJ put it, “Given the power of ‘free’ messaging, the need for the advertiser to provide clear and conspicuous disclosures of any limitations or conditions is particularly strong.” But even at this stage of litigation, the case demonstrates that we won’t back down when it comes to protecting consumers from deception.Īdvertisers should exercise caution when using the word “free.” The Initial Decision quotes the famous line from the FTC’s Book-of-the-Month Club case: “The word ‘free’ is a lure. The Initial Decision is just that – initial. Those totals don’t include online dissemination, which generated billions of impressions, or dissemination via YouTube, Facebook, Twitter, email, etc. How extensive was Intuit’s campaign? According to the Initial Decision, the “free” ads ran at least 84,356 times across 721 television networks. That includes challenging widely disseminated claims by major national advertisers. The Bureau of Consumer Protection is a relatively small office, but we patrol a vast law enforcement beat. Staff’s commitment to truth in national advertising is unwavering. You’ll want to read the Initial Decision to get the complete picture (including an encyclopedic citation of relevant caselaw), but here are some key points we think are worth emphasizing. According to the Administrative Law Judge, Intuit deceived consumers with its bogus “free” filing claims, given that approximately 100 million people – about 2/3 of filers – didn’t qualify for “free” filing. Indeed, some national TV commercials in Intuit’s “Power of Free” campaign consisted of little more than the word “free” repeated over (and over and over). Intuit’s “free” claims for TurboTax have been ubiquitous. Respondent’s purported disclosures of the conditions and qualifications for the free online filing offer were typically inconspicuous, unclear, or otherwise insufficient to inform a reasonable viewer of the terms of the offer or to modify the dominant message of ‘free.’” Numerous, widely distributed advertisements for TurboTax expressly or impliedly represented that the consumer-viewer would be able to file their taxes online for free using TurboTax, when, for a significant proportion of these consumers, this was simply untrue. “Complaint Counsel has demonstrated that Respondent violated Section 5 by engaging in deceptive advertising. Until you have time to digest the Administrative Law Judge’s ruling, we think this excerpt illustrates why we view the decision as a major victory for American consumers: The Initial Decision in the administrative action challenging allegedly deceptive “free” claims for Intuit’s TurboTax product was just released, and the meticulous 237-page opinion is a must-read for anyone in the advertising arena. About the FTC Show/hide About the FTC menu items.News and Events Show/hide News and Events menu items.Advice and Guidance Show/hide Advice and Guidance menu items.Competition and Consumer Protection Guidance Documents.Enforcement Show/hide Enforcement menu items.
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