FTC Fines H & R Block

[Lee B]

Copied from CPA Practice Advisor:

"The Federal Trade Commission has 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."

"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."

[Max W]

That's the third time in the last 18 years that HRB has been fined by the FTC.   They were also sued by the state of California, for which they had to pay $1.6 million.

 

[BulldogTom]

24 minutes ago, Max W said:

That's the third time in the last 18 years that HRB has been fined by the FTC.   They were also sued by the state of California, for which they had to pay $1.6 million.

 

chump change

[mcb39]

Why not just play fair?  Why build up a name and then drag it through the mud.  Taxpayers need a place to go for honest help?

[Lee B]

4 minutes ago, mcb39 said:

Why not just play fair?  Why build up a name and then drag it through the mud.  Taxpayers need a place to go for honest help?

They are just enhancing their revenue opportunities

[Corduroy Frog]

Does anyone remember Roni Deutsch?  Never saw as many litigious charges against a firm in my life.  Deservedly so, if you believe the fallout.

All industries have ethical concerns that can fall by the wayside in the light of enhancing revenue or puffing their wares.  Bankers do not necessarily have your best interest at heart - in spite of any outward image.  Life insurance industry, ditto.  Stock brokerage firms as well.

[BrewOne]

I think one of Block's problems is being a publicly traded company, where 8%+ annual growth is a constant requirement.  When production from the golden goose (refund anticipation loans) dropped and online filing took off, they felt compelled to squeeze more money out of fewer clients.  Certainly got away from the founders' idea of helping folks file their taxes for a reasonable price.

[mcbreck]

7 hours ago, Corduroy Frog said:

Does anyone remember Roni Deutsch? 

 

Forgot all about her. She was EVERYWHERE for about 2 years when I got into the business. Got pitched to invest in opening a tax office for her firm.

[Corduroy Frog]

Does anyone remember how H&RBlock started?  And why their home office is in Kansas City?

I'm not old enough to remember, but apparently the 1954 tax code was brand new, replacing the 1935 code.  In those days the changes did not occur every year - they didn't have software whereby congress could get away with screwing around with tax law (even in the middle of tax season).

But the changes in the 1954 code were prodigious and people needed serious help.  So H&R Block was founded to meet the needs of the people, and were located close to the IRS service center in Kansas City.  For H&RB, the rest is history.  The original box office tax store.  I haven't seen much of Jackson-Hewitt and Liberty in recent years - maybe TurboTax has eaten their lunch.  Yes, the often-advertised "free" TurboTax.  Get it and [poof] you will be just as smart as a CPA.

[Max W]

The history of HRB is a fascinating one, starting with one office and expanding to 12,000, some of them in Can, Aus and UK .  Along the way they invested in other companies that became HRB subsidiaries, from which they have derived substantial profits.  The Block brothers had a precursor business doing bookkeeping and offering free tax returns.   Free, because prior to 1954, the IRS helped taxpayers with their returns.  The Blocks never considered going into the tax return business, until a client of theirs suggested placing ads in the newspaper.    They were astounded om the first day of the ad when their was swamped with people wanting to have their taxes prepared.

I cut my teeth on HRB and never heard of most of this. For more details go to -  Company-Histories.com  then click on H