Consumer Protection

OAKLAND — California Attorney General Rob Bonta today issued the following statement after a court decided that La Cañada Flintridge is required to process the approval of a mixed-use affordable housing project under the Housing Accountability Act’s so-called “builder’s remedy” because the city did not have a compliant housing element in place when the project was proposed. The court determined that the Housing Element Law does not allow cities to certify their own housing element as compliant with the law. The City’s “self-certification” therefore did not allow it to disapprove the development application. Further, the court clarified that cities must promptly provide housing project applicants with an “exhaustive list” of any information that is missing from their applications and addressed how the Housing Accountability Act intersects with a local agency’s environmental review obligations under California Environmental Quality Act.

“We are pleased that the court agrees with us that La Cañada Flintridge must follow state housing laws to facilitate affordable housing and alleviate our housing crisis,” said Attorney General Bonta. “The California Department of Justice is committed to enforcing state laws that increase housing supply and affordability.”

In December 2023, Attorney General Bonta and the California Department of Housing and Community Development (HCD) filed a request to intervene and a proposed writ of mandate in Cal. Housing Defense Fund v. City of La Cañada Flintridge. In the filings, Attorney General Bonta and HCD request that the court allow them to intervene in the case to uphold California’s housing laws and reverse the City of La Cañada Flintridge’s denial of a mixed-use affordable housing project that would bring 80 mixed-income residential dwelling units, 14 hotel units, and 7,791 square feet of office space to the community.

A copy of the decision is available here.

OAKLAND — California Attorney General Rob Bonta today issued the following statement after JetBlue and Spirit called off their proposed $3.8 billion merger agreement. The merger was expected to eliminate low-cost airfare options for consumers, resulting in fewer seats available and substantially threaten competition in an industry already experiencing the negative impacts of market consolidation. In March 2023, Attorney General Bonta joined a multistate coalition led by the U.S. Department of Justice in a lawsuit challenging the proposed merger. Following trial last year, the district court in January ruled in favor of the coalition, blocking the proposed merger.

“Today we celebrate another victory for the important work we do on behalf of consumers and a competitive marketplace here in California and across the country. This merger would have meant higher prices and fewer choices for air travelers, and the stifling of the competitive economy that makes California vibrant and innovative,” said Attorney General Bonta. “I am proud of the work my office has done in collaboration with the U.S. Department of Justice and my fellow attorneys general and will always keep fighting on behalf of a fair and competitive economy and California consumers.”

OAKLAND — California Attorney General Rob Bonta today announced a settlement with two separate local Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the Tenant Protection Act (TPA) and for violation of the Fair Employment and Housing Act. Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant new protections for most tenants, including limiting rent increases and prohibiting landlords from evicting tenants without just cause. As part of the settlement, the owners and property manager will collectively pay restitution and penalties totaling $213,000 and must comply with strong injunctive terms. 

“When it comes to protecting tenants and ensuring that all Californians have a place to call home, the California Department of Justice is all in. Today's settlement sends a strong message: The Tenant Protection Act is the law—and it must be followed by everyone, everywhere in California,” said Attorney General Bonta. “If you are interested in getting into the renting business, as a landlord or property manager, you are responsible for knowing and abiding by state and local laws and regulations. Property management companies are responsible for complying with the TPA and related laws, even when acting on the requests of landlords. California law also protects renters from discrimination based on their source of income, such as if they use a Section 8 Housing Choice Voucher. Keeping people housed is a top priority for my office and I am committed to enforcing violations of people’s rights to housing. Full stop.”

An investigation by California Department of Justice (DOJ) found that the two individual landlords, each of whom own over a hundred units, and property manager Clemmer & Company unlawfully issued eviction notices in violation of the TPA. One landlord issued over 40 eviction notices on the basis that the landlord intended to substantially remodel the units, but the remodeling work performed did not meet the standards required under the TPA to justify eviction. The other landlord issued at least two eviction notices targeting tenants with Section 8 Housing Choice Vouchers on the same basis but performed no remodeling work. These two eviction notices violated the TPA and constituted unlawful discrimination against Section 8 Housing Choice Voucher recipients. The property manager facilitated many of these unlawful evictions. Separately, the second landlord also unlawfully increased rent for dozens of tenants, including by issuing multiple rent increases within a single year that combined to exceed the TPA’s 12-month rent cap, and failed to return security deposits within 21 days of move-out and to provide documentation of deductions as required under California’s security-deposit law.

The settlement terms include payments totaling $213,000, consisting of $93,000 in civil penalties and $120,000 in restitution to be paid to approximately 85 current and former tenants. This restitution will help affected families recover financially from rent hikes or displacement. The settlement also imposes strong injunctive terms, including the following:

• Reset rental rates for current tenants who paid unlawful rent.
• Comply with Senate Bill 567, which takes effect April 1 and strengthens the TPA’s eviction protections. Among other things, eviction notices based on substantial remodels must include a description of the work to be completed, copies of required permits, the date the owner expects to complete the work, and notification that if the substantial remodel is not commenced or completed, the tenant must be offered the opportunity to re-rent the unit at the same rent and lease terms as when the tenant left.
• Provide annual reports to California DOJ with copies of all of substantial remodel eviction notices, with other required documentation varying by defendant. 
• Clemmer & Company will provide annual trainings to all employees about landlord-tenant and fair housing laws 

Today’s settlement represents California DOJ’s third enforcement settlement under the TPA. To date, the TPA has been enforced against a large housing developer and property manager, a large landlord with statewide rental operations, and now, smaller, local landlords and a property management company.

In January, Attorney General Bonta announced a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 homes. In June 2023, Attorney General Bonta announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager to resolve allegations that the company violated the TPA by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants. Earlier this month, Attorney General Bonta issued five housing consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. The Know Your Rights alert is available in 24 languages. The remaining four consumer alerts are available in English, Spanish, Chinese (Simplified), Korean, Tagalog, and Vietnamese. All of the alerts are available here.

 A copy of the complaints and proposed judgments for all three parties are available here: 1a, 1b, 2a, 2b, 3a, 3b. 

LOS ANGELES — California Attorney General Rob Bonta, the Federal Trade Commission (FTC), and a bipartisan coalition of states, today announced the filing of a lawsuit that challenges the proposed merger of Kroger and Albertsons. Kroger and Albertsons are the two largest national supermarket chains in the country and this merger presents a significant risk of reduced competition and higher food prices nationwide. In California specifically, Kroger’s $24.6 billion purchase of Albertsons is expected to further consolidate the highly concentrated retail grocery market in Southern California, leading consumers to face fewer choices and higher prices. The merger is also expected to reduce the ability of unions to negotiate working conditions at these stores, impacting thousands of employees in California.

“This megamerger is bad for workers, for agricultural producers, and for California communities. In some markets in Southern California, Kroger-Albertsons is expected to be the only one-stop grocery option. Today, we are going to bat for a more just and competitive economy, one where companies need to compete for labor and where prices and service matter,” said Attorney General Bonta. “This merger will leave Californians with limited choices over where to shop – and for workers in this industry, where to work. As many families continue to feel the burden of inflation, fighting corporate consolidation that threatens to increase prices and reduce service is more important than ever.”

The lawsuit seeks to block the proposed Albertsons-Kroger merger, alleging it is in violation of the federal Clayton Act, which prohibits the acquisition of assets where the effect of such acquisitions may substantially lessen competition or create a monopoly. Businesses facing less competition have the ability to charge higher prices without providing improvements to the quality of goods. Anticompetitive supermarket mergers can impose other harms, including a reduction in labor market competition which may lower wages or slow wage growth, worsen benefits or working conditions, or result in other degradations of workplace quality.

In October 2022, Attorney General Bonta and five other state attorneys general sent a letter to Albertsons and Kroger demanding that Albertsons delay a $4 billion payout to stockholders until state attorneys general and the FTC complete their review of its proposed merger with Kroger, to ensure that the proposed action would not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects. In November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, asked the D.C. District Court to temporarily block Albertsons' planned $4 billion payment amid concerns that the payment would dramatically hamper Albertsons' ability to compete. Also in November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, filed a motion for a preliminary injunction to block Albertsons' planned $4 billion payment of a "special dividend" to shareholders. 

In filing today's lawsuit, Attorney General Bonta joins the FTC, and the attorneys general of Arizona, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia. 

A copy of the complaint is available here.

OAKLAND — California Attorney General Rob Bonta today issued letters to small banks and credit unions warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). Some financial institutions charge up to $36 or more for each overdraft. California consumers paid an estimated $200 million in overdraft fees in 2022, with the financial burden disproportionately falling on low-income consumers and consumers of color. Today’s letter was sent to banks and credit unions in California with assets under $10 billion. 

“Overdraft and returned check fees needlessly strip away money better spent elsewhere and penalize poor consumers. All too often, consumers don’t have a chance to avoid these surprise fees,” said Attorney General Bonta. “The CFPB has already put a stop to the worst practices by the biggest banks and credit unions. Now it is time for everyone else to follow suit: I urge all of California’s banking institutions to comply with federal and state law by eliminating these unfair fees.”

Consumers from poor households are more likely to incur overdraft fees, as are Black and Hispanic consumers. The Consumer Financial Protection Bureau has found that people who pay more than 10 overdraft fees per year end up paying nearly three-quarters of all overdraft fees. These fees can lead to substantial financial losses for families and turn setbacks into crises. Meanwhile, financial institutions nationwide generated over $7.7 billion in revenue from overdraft fees and non-sufficient funds fees in 2022. 

In the letter, Attorney General Bonta explains how overdraft and returned deposited item fees harm consumers and may violate the UCL and CFPA, which both prohibit unfair acts and practices against consumers. Under the UCL, an act is unfair if the “the gravity of the harm to the alleged victim” outweighs “the utility of the defendant’s conduct.” The CFPA defines an unfair act as one that “causes or is likely to cause substantial injury to consumers which is not reasonable avoidable by consumers” and is not outweighed by benefits to consumers or competition. In many cases, overdraft fees cannot be reasonably anticipated by consumers due to the complexity of how transactions are processed by financial institutions and the time lag between when transactions are authorized and when they are ultimately settled. This technical process makes it difficult for the average consumer to make an informed decision on whether to use overdraft protection or another form of payment for their purchase. 

The letter also warns about the use of returned deposited item fees, which are charged to consumers when the consumer deposits a check that is returned due to a problem with the check originator – the check originator has insufficient funds, their account is closed, there is a stop payment order, or the signature or other information on the check is questionable. The consumer that deposits the check typically has no knowledge of or control over the circumstances that cause the check to be returned. Charging such fees causes substantial harm because a consumer cannot reasonably avoid the injury in most instances. The individual consumer does not receive any extra service or benefit for the fee—they are simply penalized for unknowingly attempting to deposit a bad check. The practice of charging surprise fees that cannot be reasonably anticipated by a consumer likely is an unfair business practice that violates the UCL and CFPA. The financial harm imposed on consumers by surprise fees is not outweighed by any utility or benefit to consumers or competition. This “back-end” pricing actually obscures the true cost of banking while making it more difficult for consumers to compare financial products and services.

Today’s letters follow action by the CFPB, which recently issued guidance to large banks regarding similar fees. The CFPB has also issued guidance indicating that the blanket practice of charging returned deposited item fees for every returned check likely is an unfair practice that violates the CFPA. Additionally, the CFPB has brought enforcement actions against several banks for charging overdraft fees. Regions Bank agreed in a consent order to pay about $191 million in restitution and penalties for charging overdraft fees, and Wells Fargo agreed to pay $200 million in restitution to affected consumers for surprise overdraft fees.

In April 2022, Attorney General Bonta, as part of a multistate coalition, urged JPMorgan, Bank of America, U.S. Bank, and Wells Fargo to eliminate overdraft fees. 

A copy of the letter can be found here. 

OAKLAND — California Attorney General Rob Bonta today announced a settlement with DoorDash, resolving allegations that the company violated the California Consumer Privacy Act (CCPA) and the California Online Privacy Protection Act (CalOPPA). The investigation by the California Department of Justice found that DoorDash sold its California customers’ personal information without providing notice or an opportunity to opt out of that sale in violation of both the CCPA and CalOPPA. The sale occurred in connection with DoorDash’s participation in a marketing cooperative, where businesses contribute the personal information of their customers in exchange for the opportunity to advertise their products to each other’s customers. 

“DoorDash’s participation in a marketing cooperative is a sale under the CCPA and violates its customers’ rights under our landmark state privacy law. As my office has stressed time and time again, businesses must disclose when they are selling personal information and offer Californians a way to opt out of that sale,” said Attorney General Bonta. “I hope today’s settlement serves as a wakeup call to businesses: The CCPA has been in effect for over four years now, and businesses must comply with this important privacy law. Violations cannot be cured, and my office will hold businesses accountable if they sell data without protecting consumers’ rights.”

DoorDash is a San Francisco-based company that operates a website and mobile app through which consumers may order food delivery. In order to reach new customers, DoorDash participated in marketing cooperatives and disclosed consumer personal information as part of its membership in the cooperatives. In January 2020, the first month that the CCPA was in effect, DoorDash traded personal information – including names, addresses, and transaction histories – of California consumers to a marketing cooperative in a single transfer so that it could market its services to the customers of the other participating businesses. The other businesses participating in the cooperative also gained the opportunity to market to DoorDash customers. 

Today’s enforcement action alleges that this was a sale of personal information under the CCPA, that DoorDash violated the CCPA’s requirements for businesses that sell personal data, and that it failed to cure these violations. The complaint also alleges that DoorDash violated CalOPPA by failing to state in its posted privacy policy that it disclosed personally identifiable information, like a consumer’s home address, to the marketing cooperatives. Marketing cooperatives enable businesses to trade personal information, which can lead to the widespread dissemination of private consumer data, including to data brokers and other companies that are not members of the marketing cooperative.

As part of the settlement, DoorDash will pay a $375,000 civil penalty and comply with strong injunctive terms. Specifically, DoorDash must:

•  Comply with CCPA and CalOPPA, including requirements that apply to businesses that sell personal information.

•  Review contracts with marketing and analytics vendors and use of technology to evaluate if it is selling or sharing consumer personal information.

•  Provide annual reports to the Attorney General that monitors any potential sale or sharing of consumer personal information.

Today’s settlement with DoorDash marks Attorney General Bonta’s second CCPA enforcement settlement. This enforcement action underscores that sharing of customers’ personal information with a marketing cooperative is a sale within the meaning of the CCPA and that businesses can be exposed to liability under multiple California privacy laws for the same conduct. 

As part of ongoing efforts to enforce the CCPA, Attorney General Bonta last month announced an investigative sweep, and sent letters to businesses with popular streaming apps and devices alleging that they fail to comply with the CCPA. The sweep focused on the compliance of streaming services with CCPA’s opt-out requirements for businesses that sell or share consumer personal information, including those that do not offer an easy mechanism for consumers who want to stop the sale of their data. Attorney General Bonta has previously conducted investigative sweeps related to employee information and children’s privacy. In August 2022, the Attorney General announced a settlement with Sephora resolving allegations that it failed to disclose to consumers that it was selling their personal information and failed to process opt-out requests via user-enabled global privacy controls in violation of the CCPA. 

For more information about the CCPA, visit www.oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, consumers can submit a complaint online at www.oag.ca.gov/report.

A copy of the complaint and proposed stipulated judgment, which details the aforementioned settlement terms and remains subject to court approval, can be found here and here.

OAKLAND — California Attorney General Rob Bonta today announced the public release of a largely unredacted copy of the federal complaint filed by a bipartisan coalition of 33 attorneys general against Meta Platforms, Inc. and affiliates (Meta) on October 24, 2023. Co-led by Attorney General Bonta, the coalition is alleging that Meta designed and deployed harmful features on Instagram and Facebook that addict children and teens to their mental and physical detriment. As originally filed, however, much of the federal complaint included information conditionally under seal. Based on the company's own documents, the removal of the redactions provides additional context for the misconduct that the attorneys general allege against Meta. 

“Meta knows that what it is doing is bad for kids — period. Thanks to our unredacted federal complaint, it is now there in black and white, and it is damning,” said Attorney General Bonta. “We will continue to vigorously prosecute this matter.”

Highlights from the newly revealed portions of the complaint include the following:

• Mark Zuckerberg personally vetoed Meta’s proposed policy to ban image filters that simulated the effects of plastic surgery, despite internal pushback and an expert consensus that such filters harm users’ mental health, especially for women and girls. Complaint ¶¶ 333-68.

• Despite public statements that Meta does not prioritize the amount of time users spend on its social media platforms, internal documents show that Meta set explicit goals of increasing “time spent” and meticulously tracked engagement metrics, including among teen users. Complaint ¶¶ 134-150.

• Meta continuously misrepresented that its social media platforms were safe, while internal data revealed that users experienced harms on its platforms at far higher rates. Complaint ¶¶ 458-507.

• Meta knows that its social media platforms are used by millions of children under 13, including, at one point, around 30% of all 10–12-year-olds, and unlawfully collects their personal information. Meta does this despite Mark Zuckerberg testifying before Congress in 2021 that Meta “kicks off” children under 13. Complaint ¶¶ 642-811. 

A copy of the largely unredacted complaint can be found here. 

OAKLAND — California Attorney General Rob Bonta, in partnership with the Federal Trade Commission (FTC), today announced a settlement with CRI Genetics (CRI), a Southern California company that offers DNA testing and ancestry services to consumers. Today’s settlement, which is subject to court approval, resolves allegations that CRI misled consumers about the purported superiority of its genetic testing services, presented false and misleading consumer testimonials and reviews, and engaged in deceptive billing practices. The settlement requires CRI to pay the state $700,000 in civil penalties and restricts CRI and its founder from engaging in future deceptive conduct. CRI’s customers will also receive greater privacy protections as a result of the settlement. 

“CRI Genetics could have found legitimate ways to market its services. Unfortunately, in its pursuit of growth and profits, the company repeatedly misled consumers. The FTC and my office took notice, we investigated, and we are delivering results today,” said Attorney General Rob Bonta. “Our settlement not only holds CRI Genetics accountable for its past misconduct — it also aims to ensure that CRI Genetics doesn’t engage in similar misconduct going forward. I want to thank our federal counterparts at the FTC for their continued partnership and commitment to ensuring that all businesses play by the same rules.”

“Today’s action continues the FTC’s crackdown on deceptive reviews, dark patterns, and baseless claims around algorithmic solutions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are proud to partner with California on this important matter and will continue to carefully scrutinize claims around biometric information technologies.”

The complaint, which was filed simultaneously with the proposed judgment that details the settlement terms, alleges that CRI engaged in a number of misleading marketing practices, including misrepresenting that its DNA testing services are more accurate and detailed than those of its competitors, and that its ancestry reports show exactly where a consumer’s ancestors are from with over 90% accuracy. Further, CRI created a genetics testing review website deceptively formatted to look independent. Through that website, CRI provided inflated reviews of its genetic testing services. In addition, the company presented false consumer testimonials on its own website and social media platforms like Facebook. Moreover, the complaint alleges CRI manipulated consumers into purchasing unwanted add-on services, forcing consumers to go through a time-consuming and confusing refund process.

Under the terms of the settlement:

• CRI must not make any misrepresentations about its genetic testing and analysis services.
• CRI must not employ deceptive tactics in selling its genetic testing and analysis services, in representing endorsements, or in billing practices.
• CRI must pay $700,000 in civil penalties, paid over four years and secured by commercial property.
• CRI must disclose its website billing practices and any sharing or usage of genetic data for any purpose other than the services the consumer purchases.
• CRI must comply with California law, including the California Consumer Privacy Act and the Genetic Information Privacy Act. 

A copy of the complaint and proposed judgment can be found here and here.

Court set closing arguments for May 1-3, 2024, and verdict is expected next year

OAKLAND — California Attorney General Rob Bonta today issued a statement following the conclusion of the 10-week bench trial in United States v. Google, an antitrust case regarding Google's monopoly on general internet search services and search-based advertising: 

"Yesterday, the historic antitrust trial against Google came to an end. My office proudly joined the U.S. Department of Justice in seeking to hold accountable the Mountain View-based company, and I continue to feel confident in the strength of our case," said Attorney General Bonta. "With nearly 90% of searches relying on Google, this Google search case is relevant to almost everyone in country. Among the many revelations that came to light at trial was that Google pays other companies billions of dollars each year to ensure that it is the default search engine for iPhones, Android phones, and most third-party web browsers, such as Mozilla’s Firefox. In 2021 alone, Google paid a whopping $26.3 billion to maintain this monopoly. The California Department of Justice has two additional antitrust cases pending against Google, and we will do everything in our power to protect competition in the marketplace."

BACKGROUND 

On December 11, 2020, then-Attorney General Xavier Becerra announced that California would be joining the U.S. Department of Justice’s lawsuit against Google regarding its monopoly on general internet search services and search-based advertising. This ten-week bench trial in Washington, D.C. began on September 12, 2023 and concluded yesterday. The U.S. District Court for the District of Columbia set closing arguments for May 1-3, 2024. A verdict is expected next year.  

Further, on July 7, 2021, Attorney General Bonta announced a multistate lawsuit against Google for monopolizing the smartphone application market through its Google Play Store in violation of state and federal antitrust laws. This case has a tentative settlement joined by 53 attorneys general. As requested by the U.S. District Court for the Northern District of California in San Francisco, the settlement will be presented to the court after the jury trial in a related case, Epic v. Google, concludes.

Finally, on January 24, 2023, Attorney General Bonta joined the U.S. Department of Justice and eight original states in filing a lawsuit against Google charging the company with operating an unfair monopoly scheme in markets for advertising technology. Seventeen states have now joined this case, which is pending in the rocket docket in the U.S. District Court for the Eastern District of Virginia. 

Starting next year, millions of eligible taxpayers can submit federal and state taxes at no cost 

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 18 attorneys general in submitting a comment letter to U.S. Treasury Secretary Janet Yellen expressing strong support for the Internal Revenue Service’s (IRS) Direct File pilot program. The pilot program will allow eligible taxpayers to file their 2023 federal taxes directly with the IRS for free. Eligible taxpayers in California and three other states — Arizona, Massachusetts, and New York — will also be able to file their 2023 state taxes at no cost using the pilot program. Moreover, eligible taxpayers in nine other states without a state income tax — Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming — may be able to take advantage of the pilot program as well. In their letter, the attorneys general write that their “support for an IRS-run alternative is informed both by our belief in consumer choice and our past experience with the tax preparation industry.” 

“Next year, thanks to the Biden Administration, millions of taxpayers across the country will be able to submit, free of charge, their federal and state taxes,” said Attorney General Bonta. "This first-of-its-kind pilot program is good for taxpayers and it is good for our state and federal government. My fellow attorneys general and I want to make clear that we fully support the IRS’s efforts. It is important that we continue to do everything in our power to remove barriers to filing, which too often results in families missing out on critical tax benefits like the Earned Income Tax Credit.”

According to the IRS, the Direct File pilot program will initially be limited to taxpayers with “relatively simple returns.” For example, in terms of allowable income reporting under the pilot program, the IRS lists the following: W-2 wage income, social security and railroad retirement income, unemployment compensation, and interest of $1500 or less. In terms of allowable credits, the IRS lists the following: Earned Income Tax Credit, Child Tax Credit, and Credit for Other Dependents. More information on the Direct File pilot program can be found here. 

On May 4, 2022, Attorney General Bonta announced, as part of a coalition of 51 attorneys general and with the Los Angeles City Attorney and Santa Clara County Counsel, a $141 million settlement against Intuit. The settlement, which is referenced in the comment letter, resolved allegations that the California-based company deceptively advertised its “free” online TurboTax products. Although 70% of taxpayers qualify for the IRS’s Free File Program — a separate program that is a public-private partnership operated by the IRS, Intuit, and others — less than 3% of taxpayers used it to file their returns in 2020. This abysmal rate was due, at least in part, to tricks and tactics used by Intuit to steer taxpayers away from the IRS Free File Program and to its paid commercial products. A year later, on May 4, 2023, Attorney General Bonta announced that consumers who were tricked by TurboTax’s owner Intuit into paying for free tax services would begin receiving checks related to the settlement.

Signed into law by President Joe Biden on August 22, 2022, the Inflation Reduction Act of 2022 directed the IRS to look into the possibility of creating a free filing option for taxpayers. On May 16, 2023, the IRS submitted a report to Congress explaining that a majority of taxpayers would be interested in using a free IRS-run filing option and that delivering such an option was within the agency’s capabilities.

In submitting the comment letter, Attorney General Bonta joins the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Washington, and the District of Columbia.

A copy of the comment letter can be found here.