FTC mandates changes at H&R Block

The Federal Trade Commission has finalized an order requiring H&R Block to make a number of changes for the 2025 filing season, as well as longer-term changes.

The settlement also requires Block to pay $7 million toward compensating consumers harmed by the company's unlawful practices.

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

The H&R Block, Inc. logo is displayed in front of the company's flagship office in New York, U.S., on Friday, March 3, 2012. H&R Block, Inc. provides tax services to the general public, accounting and consulting services, and consumer financial and personal productivity software. Photographer: Scott Eells/Bloomberg
An H&R Block location in New York City
Scott Eells/Bloomberg

The settlement requires Block to make it easier for consumers to downgrade products and to stop deleting consumers' previously entered data upon downgrade. By Feb. 15, 2025, Block must allow consumers to downgrade products using a chatbot or other automation instead of calling customer service or chatting with a customer service agent.

When a consumer downgrades back to the product they upgraded from, Block will have to ensure consumers return to the same point in filing where they were when they upgraded and must provide "an easily noticeable and always available way" for consumers to downgrade.

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 most taxpayers don't qualify.

"We are pleased to put this behind us so we can focus on serving our clients during the 2025 tax season," H&R Block said in statement.

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