Notice2024-26695
H&R Block; Analysis of Proposed Consent Order To Aid Public Comment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 15, 2024
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair or deceptive acts or practices. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order--embodied in the consent agreement--that would settle these allegations.
Full Text
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<title>Federal Register, Volume 89 Issue 221 (Friday, November 15, 2024)</title>
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[Federal Register Volume 89, Number 221 (Friday, November 15, 2024)]
[Notices]
[Pages 90290-90292]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26695]
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FEDERAL TRADE COMMISSION
[Docket No. 9427]
H&R Block; Analysis of Proposed Consent Order To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the complaint and the
terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before December 16, 2024.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the SUPPLEMENTARY INFORMATION section
below. Please write ``H&R Block; Docket No. 9427'' on your comment and
file your comment online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following
the instructions on the web-based form. If you prefer to file your
comment on paper, please mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW, Mail Stop H-144 (Annex T), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Claire Wack (202-326-2836), Attorney,
Division of Marketing Practices, Bureau of Consumer Protection, Federal
Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec. 2.34, 16 CFR
2.34, notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis to Aid Public Comment describes the terms of the consent
agreement and the allegations in the complaint. An electronic copy of
the full text of the consent agreement package can be obtained at
<a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before December 16,
2024. Write ``H&R Block; Docket No. 9427'' on your comment. Your
comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Because of heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website. If you prefer to file your comment on paper, write ``H&R
Block; Docket No. 9427'' on your comment and on the envelope, and mail
your comment to the following address: Federal Trade Commission, Office
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex
T), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule Sec. 4.9(c). In
particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule Sec. 4.9(c). Your
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted on the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website--as legally required by FTC Rule Sec. 4.9(b)--we cannot redact
or remove your comment from that website, unless you submit a
confidentiality request that meets the requirements for such treatment
under FTC Rule Sec. 4.9(c), and the General Counsel grants that
request.
Visit the FTC website at <a href="https://www.ftc.gov">https://www.ftc.gov</a> to read this document
and the news release describing the proposed settlement. The FTC Act
and other laws the Commission administers permit the collection of
public comments to consider and use in this proceeding, as appropriate.
The Commission will consider all timely and responsive public comments
it receives on or before December 16, 2024. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, a proposed stipulated Decision and Order (``Proposed
Order'') to resolve In the Matter of H&R Block Inc., HRB Digital LLC,
and HRB Tax Group, Inc. (collectively, ``Respondents''). The Proposed
Order
[[Page 90291]]
has been placed on the public record for 30 days for receipt of
comments from interested persons. Comments received during this period
will become part of the public record. After 30 days, the Commission
will again review the agreement, along with any comments received, and
will decide whether it should withdraw from the agreement and take
appropriate action or make final the Proposed Order.
This matter involves Respondents' advertising and design of their
online tax preparation products (``Online Products''). According to the
Commission's complaint, Respondents deceptively market their Online
Products by representing to consumers that they can file for free using
H&R Block. In addition, the Complaint alleges that Respondents designed
their Online Products to encumber consumers attempting to downgrade
from a more expensive Online Product to a less expensive or free
product, through two unfair practices: (1) requiring consumers wishing
to downgrade to first contact customer service to request and complete
the downgrade (``customer service contact requirement''), and (2) upon
downgrading, deleting all information the consumer has entered
(``deletion requirement''). Based on the foregoing, the Commission
alleges that Respondents have engaged in, and are engaging in, unfair
and deceptive business practices in the advertising, marketing,
distribution, and sale of their Online Products, in violation of
section 5 of the FTC Act, 15 U.S.C. 45.
The Proposed Order contains injunctive provisions addressing the
violations alleged in the Complaint and $7 million to redress consumers
harmed by Respondents' unlawful practices. Section I provides for
notice to consumers and staggered elimination of the customer service
contact and deletion requirements, with full elimination of these
requirements mandated by January 15, 2026. Section I.A. requires
Respondents to notify upgrading consumers by January 15, 2025, that, if
they later choose to downgrade, their information will not be saved and
they will have to start over. This provision will be in place until the
deletion requirements are eliminated, January 15, 2026. Section I.B.
sets forth the consumer notice that Respondents must give at the point
of upgrade, starting January 15, 2026, to describe the new downgrading
practices. Section I.C. requires that Respondents allow downgrades to
the same extent they permit upgrades. Section I.D. requires Respondents
to update their in-product chatbot assistant to permit downgrades
without requiring the participation of a live agent by February 15,
2025. Section I.E. of the Proposed Order requires Respondents to
provide another automated means to downgrade that is easily noticeable
and persistently available to the consumer within the Online Products
by January 15, 2026. Section I.F. prohibits requiring the participation
of a live agent to effectuate a downgrade by February 15, 2025. Section
I.G. requires that Respondents provide to consumers by January 15,
2025, clear and easily noticeable instructions on how to downgrade.
Section I.H. sets forth required changes to the deletion requirement
that Respondents must implement by January 15, 2026.
Section II prohibits Respondents from representing that their
Online Products are free unless such products are actually free to all
consumers, or Respondents clearly and conspicuously disclose the
percentage of taxpayers that qualify for the offer. Alternatively,
Respondents may disclose that the offer is not free for a majority of
taxpayers. Section III prohibits Respondents generally from
misrepresenting any material fact concerning the Online Products.
Section IV includes $7 million to redress consumers who were harmed by
Respondents' illegal practices.
Section V contains ancillary provisions necessary to effectuate
Respondents' payment of the redress amount, while Section VI requires
Respondents to provide customer information needed for the
administration of consumer redress. Section VII requires Respondents,
along with certain employees and successors, to acknowledge receipt of
the Proposed Order.
Sections VIII through X of the Proposed Order are reporting and
compliance provisions, which include recordkeeping requirements and
provisions requiring Respondents to provide information or documents
necessary for the Commission to monitor compliance with the Proposed
Order. Section XI states that the Proposed Order will remain in effect
for twenty (20) years, with certain exceptions.
The purpose of this analysis is to aid public comment on the
Proposed Order. It is not intended to constitute an official
interpretation of the Complaint or Proposed Order, or to modify in any
way the Proposed Order's terms.
By direction of the Commission.
April J. Tabor,
Secretary.
Concurring Statement of Commissioner Andrew N. Ferguson
Today, the Commission votes to accept for public comment the
stipulated Decision and Order in In re H&R Block Inc., HRB Digital LLC,
and HRB Tax Group, Inc (collectively, ``H&R Block''). H&R Block offers
tax preparation and filing services to assist consumers in filing their
taxes. The complaint accuses H&R Block of engaging in unfair and
deceptive business practices relating to its customer-service-contact
requirements, data-wiping practices, and marketing practices.\1\
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\1\ In re H&R Block Inc., HRB Digital LLC, and HRB Tax Group,
No. 9427, Complaint at ]] 56-62.
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The Commission alleges that H&R Block designed its online products
to increase the burden on consumers who wanted to downgrade from a more
expensive version of its tax-preparation product to a less expensive
version.\2\ H&R Block allegedly required consumers to contact its
customer service department either by phone or online chat to downgrade
their products. H&R Block also allegedly deleted all the information a
consumer previously entered if the consumer decided to downgrade to a
less expensive product.\3\ Finally, the complaint alleges that H&R
Block misleadingly marketed a free version of its online tax
preparation product while knowing that very few consumers were eligible
to use the free version.\4\
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\2\ Id. at ] 7.
\3\ Ibid.
\4\ Id. at ]] 60-61.
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I concur in the Commission's order accepting for public comment the
stipulated Decision and Order against H&R Block. But I have serious
reservations about the merits of Count III--the deceptive marketing of
H&R Block's free version of its online tax preparation products. The
U.S. Court of Appeals for the Fifth Circuit is currently reviewing a
very similar claim in a different case.\5\ The Fifth Circuit is also
considering the constitutionality of dual-layer removal protections for
the Commission's Administrative Law Judges, a question presented in
this case that has divided the Commission.\6\ I
[[Page 90292]]
withhold my final judgment on the lawfulness of the stipulated Decision
and Order until I have reviewed public comments and the Fifth Circuit's
decision, if it issues in time.
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\5\ Petition for Review, Intuit v. FTC, No. 24-60040 (5th Cir.
Jan. 24, 2024), ECF No. 1; Br. for Pet'r at 34-54, Intuit v. FTC,
No. 24-600040 (5th Cir. Apr. 15, 2024), ECF No. 56.
\6\ See Br. for Pet'r at 27-30, Intuit v. FTC, No. 24-60040 (5th
Cir. Apr. 15, 2024), ECF No. 56; compare Order Denying Resp'ts' Mot.
To Disqualify the Admin. Law Judge, In the Matter of H&R Block Inc.,
et al., FTC Docket No. 9427 (Oct. 18, 2024) and Statement of Chair
Lina M. Khan, Joined by Comm'r Alvaro Bedoya, Concurring in the
Denial of the Motion, In the Matter of H&R Block, Inc., et al., FTC
Docket No. 9427 (Oct. 18, 2024), with Statement of Comm'r Andrew N.
Ferguson, In the Matter of H&R Block, Inc., et al., Dissenting in
Part and Concurring in the Denial of the Motion, FTC Docket No. 9427
(Oct. 18, 2024).
[FR Doc. 2024-26695 Filed 11-14-24; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on November 15, 2024.
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