According to the company, the company “lures” customers with giveaways. complaint Filed in DC Superior Court In 2022, create a YouTube video that invites customers to “Come and get your $50!” Or it shows a Freedom Tax sign waving with a placard that says, “Get your $50 now.”
“'Cash in a Flash' ('CIF') is a $50 'just file' cash benefit that Freedom Tax is rolling out to encourage consumers to use tax preparation services. ” the complaint states. “However, this upfront fee actually provides no real benefit to most consumers, because the Freedom Tax increases the cost of tax preparation for these consumers, and the Freedom Tax Statement on CIF is false and misleading.”
Liberty did not immediately respond to a request for comment. The company is the third largest tax preparation company in the United States, with two brick-and-mortar locations in the 7th Ward, according to the Attorney General's Office.
As part of the lawsuit settlement, Liberty will pay $550,000 to customers in Washington, D.C., and $200,000 in fines to the district, according to the company. consent order. According to the order, customers will be compensated based on the number of times they take advantage of the promotion and will receive approximately $42 for each CIF payment.
In addition, Liberty will suspend promotions nationwide and will be subject to five years of monitoring.
“Freedom Tax defrauded thousands of taxpayers in Washington, D.C., with a false 'cash in an instant' promotion,” Schwalb said in a statement. “This settlement not only requires Freedom Tax to compensate all Washington residents who took advantage of it illegally, but also creates strong national legal guardrails to protect taxpayers across the country.”
Jorge Tormes, a senior staff attorney at the legal services nonprofit TzedekDC, which has worked with the attorney general on legislative issues, said in a statement that the settlement was “extremely important.”
“This investigation… protects D.C. residents, especially working-class residents of color, from deceptive practices aimed at extracting wealth from the Seventh Ward community,” the statement said.
