District AG Trashes “Cash in a Flash” Promotion

  • District of Columbia AG Brian L. Schwalb settled with JTH Tax, Inc., doing business as Liberty Tax Service, to resolve allegations that the tax preparation company violated the District’s Consumer Protection Procedures Act through a deceptive “cash in a flash” promotion.
  • AG Schwalb alleges that Liberty Tax offered immediate handouts of $50 in cash to consumers who filed their taxes through the company and explicitly stated there was “no catch” to the promotion. However, according to the AG’s office, Liberty Tax allegedly increased its prices for consumers who accepted the cash; consumers who accepted the “cash in a flash” promotion were, on average, charged $200 more than those who did not.
  • Under the terms of the settlement, Liberty Tax must pay $550,000 in restitution to affected consumers and a $200,000 penalty to the District. In addition, the company is prohibited from utilizing the “cash in a flash” promotion across the U.S., and is banned from creating any other incentive programs that increase the charges that consumers pay for tax preparation services.