MIAMI BEACH, Fla.--(BUSINESS WIRE)--Happy Tax, the fastest growing tax franchise according to Entrepreneur Magazine, has announced that it has filed suit against the nation's largest tax preparation franchise, H&R Block. The suit intends to stop H&R Block (NYSE: HRB) from making what Happy Tax claims are false and misleading representations in their advertisements, which have been misleading consumers, including Happy Tax's current and potential customers. The suit is proceeding in the United States District Court for the Southern District of New York, Case Number 1:19-cv-00451.
Since 2015, Happy Tax has utilized and advertised upfront and transparent pricing for its assisted CPA prepared tax preparation services. Happy Tax was the first notable national company to introduce this innovative pricing strategy to an industry that historically provided prices to clients after their tax returns were completed.
The alleged false and misleading commercial and web advertising promotes upfront and transparent pricing as being available “ONLY From H&R Block” (emphasis added). Section 43(a) of the Lanham Act, codified at 15 U.S.C. § 1125, provides in relevant part:
Any person who . . . in commercial advertising or promotion, misrepresents the nature, characteristics, quality, or geographic origin of his or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.
Federal courts have held that advertising violates this statute when it is likely to mislead and confuse a consumer. Happy Tax has been offering and advertising upfront and transparent pricing since 2015; therefore, H&R Block’s new advertising claims are false and misleading.
Given the importance of pricing in the tax return preparation market, such deception is material and likely to influence consumers’ purchasing decisions. As Happy Tax has been injured by H&R Block’s false and misleading advertising, Happy Tax is entitled to monetary damages and injunctive relief under the Lanham Act. A hearing will be scheduled to request a preliminary injunction from the Court to compel H&R Block to cease and desist making false or misleading statements, stop any use of the false misleading promotions in all forms of media.
Happy Tax had previously attempted to resolve this matter amicably prior to filing this lawsuit by bringing the alleged false and misleading claims to light with both H&R Block’s CEO and their General Counsel.
Happy Tax CEO Mario Costanz explained, "We filed this false advertising lawsuit to stop H&R Block from intentionally and improperly misleading consumers." According to Mr. Costanz, "At Happy Tax, we pride ourselves on being innovators in the tax industry and have always used our upfront, transparent pricing as a key differentiator. While I am pleased that so many in the industry continue to copy our ideas, I don’t appreciate that they are taking credit for them in misleading ways. In interviews and in their investor calls, H&R Block’s CEO has even paraphrased, almost verbatim, my statements about pricing strategies. Happy Tax has invested significant time and money into marketing our convenient, professional and transparent solution, and we will pursue all appropriate legal avenues to protect our brand from false and misleading statements and unfair competition from industry giants."
Mr. Costanz added that pursuing legal action against H&R Block "is consistent with our brand commitment to our customers and franchisees. Just because H&R Block is a large company does not give them the right to run afoul of the law claiming to be the only one offering the very pricing strategy that we introduced years ago. Our Company will not tolerate false and misleading marketing claims by any company that serves only to undermine our ability to continue providing consumers with innovative approaches to preparing and filing their taxes."
To view a copy of the complaint, click here.
The Happy Tax model has changed the status quo of inconvenient tax preparation and replaced it with top-tier CPA prepared returns, offered conveniently to consumers in-person or at-home. The result is a service better suited for today’s consumers who want anytime, anywhere service from a licensed professional.
CEO Email: Mario@HappyTax.com
Franchise Information: https://GetHappyTax.com
Area Representative Information: https://GetHappyTax.com/Area-Representative
Consumer Information: http://HappyTax.com
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Small Business Bookkeeping & Accounting: http://HappyAccounting.com
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ABOUT HAPPY TAX
Shaking up the $19 billion tax preparation industry, Happy Tax’s disruptive model was born out of frustration with unreliable, under-qualified tax preparers with no licensing or certification and as little as five days of tax training. Happy Tax is designed to bridge the gap between the high quality, pampering, and convenient customer service that consumers want with accurate, reliable, and professional tax returns prepared by US-based, licensed CPAs and tax attorneys. Happy Tax offers franchises, independent contractor relationships, and Area Representative deals for those wanting to earn additional income and build their own business. Utilizing its patent-pending technology and processes, Happy Tax partners can operate with low overhead and increased flexibility.