District of Columbia Attorney General Brian L. Schwalb recently announced that the nation’s third-largest tax preparation company, Liberty Tax, will pay $550,000 to more than 7,300 city residents who were misled and overcharged for their tax services.
As part of the settlement resolving the consumer protection lawsuit that the Office of the Attorney General filed against it, Liberty Tax must also pay $200,000 to the District and permanently end the deceptive marketing and pricing tactics it used across the U.S.
“Liberty Tax deceived thousands of taxpayers in D.C. with its bogus ‘cash in a flash’ promotion,” said Schwalb. “This settlement not only forces Liberty Tax to compensate every Washingtonian it unlawfully took advantage of, but also creates strong, nationwide legal guardrails that will protect taxpayers across the country. Our office will continue to use the law to hold accountable any business that seeks to unfairly profit by deceiving D.C. residents.”
“The investigation and legal action by Attorney General Schwalb’s office against Liberty Tax is vitally important and protects D.C. residents, especially working-class residents of color, from deceitful practices designed to extract wealth from the Ward 7 community,” said Jorge Tormes, senior staff attorney at Tzedek DC, a legal services nonprofit focused on consumer issues.
Liberty Tax has two locations in the District, both in Ward 7. In addition to the payments due to the settlement, Liberty Tax must stop using deceptive cash incentives and submit to monitoring for five years.