SAN FRANCISCO (CN) - Intuit charges usurious "quadruple-digit interest rates" as fees for using a so-called free online edition of its TurboTax software, according to a federal class action.
Names plaintiffs Tasha and Fredierick Smith say Intuit violates the Truth in Lending Act, and California business and usury laws.
The Smiths, of Arkansas, used Intuit's online tax preparation software in 2009, 2010, and 2011. Each time, they say, they deferred paying the $86.90 fee to use the software, and chose to have it deducted from their tax refund.
Intuit charged them another $29.95 for this, more than 34 percent of the $86.90 fee, the Smiths say. They received their refund from the IRS in 2 weeks.
"Plaintiffs paid $29.95 for an approximate 14-day loan of $86.90," the complaint states. "The APR, properly calculated in accordance with TILA, was an exorbitant quadruple-digit interest rate. Such interest rates also violated California's usury laws."
Intuit calls the $29.95 charge a Refund Processing Service Fee.
The Smiths call it "a ruse and merely a device through which usurious interest would be exacted".
They claim that Intuit's "arrangement with various banks, whereby the banks collected the Refund Processing Service Fees from plaintiffs and the subclasses and delivered a substantial portion thereof to the defendant was essentially a sham arrangement, with the aim of evading California's usury law."
The Smiths say Intuit violates federal and California law by not accurately disclosing interest rates and finance charges for deferring payment of tax preparation fees.
They seek restitution and statutory, compensatory, and treble damages.
They are represented by Hank Bates with Carney Williams Bates of Little Rock, Ark., with co-counsel from Golomb & Honik in Philadelphia, Ku & Mussman in Miami, and Milstein Adelman of Santa Monica.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.
Additional Reads
-
Top 8 today September 19, 2023 -
-
Top 8 today September 13, 2023
-
