H&R Block Settles Deceptive Advertising Claim

[Bishop]

The state Attorney General’s office has settled with the tax preparation company H&R Block to end the deceptive advertising practices it used in promotions to increase business.



In an agreement with Attorney General's Office, H&R Block must pay $245,000 in penalties and costs for failing to post rules and regulations of its promotions at its offices and using false and deceptive advertising material to promote two sweepstakes games. H&R Block also must disclose that the purchase of H&R Block products is not necessary to enter any promotional contest.

"H&R Block has agreed to implement the necessary changes so that all future promotions are in full compliance with New York state law," said Attorney General Andrew Cuomo. "This settlement, while directed at H&R Block, serves as a warning to companies to make sure that all sweepstake rules and regulations are clearly spelled out with absolutely no ambiguity."

H&R Block operates 400 retail offices in New York State. The Missouri based company conducted two sweepstakes games: "Double Your Refund Instant Win Game" from January through April 2006 and "Toss Out Your Bills Instant Win Game" from January through April 2007. In both games, consumers could win by means of a scratch-off card, which was given to customers who purchased H&R Block tax preparation services. New York state law requires companies conducting sweepstakes to give consumers an opportunity to enter and win without purchasing a product.

H&R Block did not provide this opportunity for non-paying consumers. The company’s television, radio and print ads announced the ability to play if consumers had their taxes done by the company, and then directed consumers to H&R Block offices or hrblock.com for official rules on how to enter without a purchase. However, the "no purchase necessary" qualification was either: flashed on screen briefly with no verbal announcement in television ads; announced with rapid-fire language at the end of radio ads; or buried in a small footnote in print ads. The Attorney General’s investigation found that no such information about entering the contest without purchasing a product was available at H&R block tax offices.In addition to paying $245,000, H&R Block must also:

• Clearly post contest rules and regulations at participating H&R Block retail offices to enable non-purchasers to obtain the information for entry in contests
  
• Conduct training to ensure that sales employees are able to direct consumers to the information regarding non-purchase methods of entry
  
• Comply with all rules and regulations of promotions
  
• Clearly disclose the availability of alternative methods of entry in all advertising that refers to the purchase of an H&R Block product or service as one of the means to enter the contest.