TurboTax Advertised Your Refund Advance as “0% Interest.” A New Lawsuit Says Service Members Were Charged Far More Than That

A proposed class action lawsuit filed in March 2026 accuses Intuit — the company behind TurboTax — and six of its subsidiaries and lending partners of violating the Military Lending Act by charging excessive hidden fees on refund advance loans and requiring military borrowers to sign away their right to sue. The case, Bostick v. Intuit Inc. et al., was filed in the U.S. District Court for the Southern District of California on behalf of active-duty service members and their dependents who took out a TurboTax refund advance loan. No settlement exists. The lawsuit is in early litigation.

Field	Detail
Case Name	Bostick v. Intuit Inc., et al.
Case Number	3:26-cv-01444
Court	U.S. District Court, Southern District of California
Filed	March 2026
Defendants	Intuit Inc., Intuit TT Offerings Inc., CK Progress Inc. d/b/a Credit Karma, MVB Bank Inc., First Century Bank N.A., Santa Barbara Tax Products Group LLC, Green Dot Bank
Law Alleged Violated	Military Lending Act (MLA), 10 U.S.C. § 987
Class Status	Proposed — not yet certified
Settlement	None
Claim Deadline	TBD

Where things stand: The lawsuit was filed in March 2026 and is in its earliest stage. No class has been certified, no settlement has been reached, and no claim process is open. Service members who believe they were affected should document their loan history and monitor the case for updates.

TurboTax Calls It “0% Interest.” Federal Law Says That’s Not the Whole Story.

Every tax season, Intuit promotes its TurboTax Refund Advance as a free loan — no interest, no fees, money available the same day you file. For most consumers, that marketing holds up. But for active-duty service members and their dependents, federal law imposes a different measuring stick.

Plaintiff Zachary Bostick argues that while the loans are advertised as carrying “0% interest,” the Military Lending Act requires calculation of the Military Annual Percentage Rate — which includes not only stated interest but also fees and charges imposed directly or indirectly as a condition of the extension of credit.

That distinction is the core of the lawsuit. A loan with zero stated interest can still violate the MLA’s 36% MAPR cap if borrowers must use fee-bearing accounts or services just to access the money. Bostick claims TurboTax refund advance loans are inseparable from a mandatory refund-processing and account structure that enables Intuit and its partners to impose fees incident to the extension of credit.

The refund advance loans are repaid through direct routing and interception of the borrower’s federal tax refund — meaning the repayment mechanism itself flows through fee-bearing accounts controlled by Intuit’s banking and fintech partners.

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Three Violations the Lawsuit Puts at Intuit’s Door

The complaint against Intuit rests on three distinct MLA violations. Each one, if proven, carries its own legal consequences.

1. Excessive fees that push the MAPR above 36%

The MLA’s 36% MAPR cap is not just an interest rate ceiling — it sweeps in application fees, participation fees, fees for ancillary products required to obtain the credit, and any other charges imposed as a condition of the loan. Bostick alleges the combination of fees tied to receiving and repaying a TurboTax refund advance pushes the true cost of borrowing well above that federal limit for covered military borrowers.

2. Unlawful security interest and account access

The MLA generally prohibits creditors from using a check or other method to access a borrower’s deposit, savings, or other financial accounts as a condition of extending credit. Bostick claims that routing the tax refund through a temporary deposit account — controlled by Intuit and its banking partners — to repay the loan constitutes exactly the kind of unlawful account access the MLA forbids.

3. Mandatory arbitration clause that strips service members of their right to sue

Under the MLA, a lender cannot make a military borrower agree to settle a dispute with arbitration. Agreeing to arbitration usually also means giving up the right to join a class-action lawsuit. Bostick argues that Intuit and its subsidiaries unlawfully required borrowers to waive their rights to seek relief in court as a condition of obtaining a TurboTax refund advance loan. Under the MLA, a loan contract containing such a clause is void from its inception — as if the agreement never existed.

Who the Lawsuit Is Trying to Cover

Bostick wants to represent a nationwide class of covered borrowers who obtained a TurboTax refund advance loan within the applicable limitations period and were required to authorize routing of their federal tax refund through a temporary deposit account used for repayment of the loan and deduction of fees.

The MLA’s protections cover a specific population — not all TurboTax users. You may potentially fall within the proposed class if:

• You are active-duty in the Army, Navy, Marine Corps, Air Force, Space Force, or Coast Guard, or a member of the National Guard or Reserve on active duty for 30 or more days.
• Your spouse or a qualifying financial dependent took out a TurboTax refund advance loan while you were on active duty.
• You obtained a TurboTax refund advance loan through any of the named defendants within the applicable statute of limitations period.
• Your loan agreement required you to route your federal tax refund through a temporary deposit account to repay the loan.

The lawsuit covers a nationwide class, not just California borrowers. The Southern District of California was selected as the filing venue because Intuit is headquartered in the state.

This Isn’t the Only Tax Prep Company Facing This Accusation

The Intuit lawsuit is part of a coordinated wave of MLA litigation targeting the tax preparation industry’s refund advance products.

A separate federal class action filed in February 2026 alleges that H&R Block’s Refund Advance and Emerald Advance loans charge active-duty military members fees that push the effective interest rate above the Military Lending Act’s 36% annual cap — despite being marketed as free. That suit also alleges the loan agreements illegally require military borrowers to waive their right to a class action and to submit to mandatory arbitration.

Attorneys are also investigating whether Jackson Hewitt’s tax refund advance products contain similar MLA violations, including arbitration clauses and class action waivers that are prohibited under federal law.

The pattern across all three lawsuits is identical: a product marketed as free to consumers, hidden fees that become visible only when the MAPR is calculated correctly under military lending rules, and arbitration clauses that the MLA explicitly prohibits. All three cases are in early litigation with no settlements announced.

What the Military Lending Act Actually Guarantees You

Congress passed the MLA in 2006 specifically to protect service members from predatory lending. In 2015, the Department of Defense significantly expanded the law’s reach to cover a wider range of consumer credit products. Today, the MLA provides service members and their covered dependents with the following rights on any qualifying loan:

• 36% MAPR cap. No lender can charge more than 36% annually, once all mandatory fees are included in the rate calculation.
• No mandatory arbitration. A creditor cannot require a military borrower to submit to mandatory arbitration or waive rights under state or federal law, including the Servicemembers Civil Relief Act.
• No prepayment penalty. You can pay off your loan early without being charged a fee.
• No mandatory allotment. A lender cannot require you to set up automatic deductions from your military pay as a condition of the loan.
• Required disclosures. Lenders must provide the MAPR both verbally and in writing before you sign.

A loan contract that violates any of these provisions is void under federal law. Under the MLA, borrowers are entitled to actual damages — but not less than $500 for each violation.

The Case Timeline So Far

Milestone	Date
MLA expanded to cover broader consumer credit	October 2015
H&R Block MLA class action filed	February 2026
Bostick v. Intuit Inc. et al. filed	March 2026
Class certification hearing	TBD
Settlement / resolution	TBD

Frequently Asked Questions

I’m active-duty military and took out a TurboTax refund advance. What should I do right now?

 Locate your loan documents, any emails or disclosures you received at the time of the loan, and your tax filing records. If your agreement contained an arbitration clause or required you to route your refund through a deposit account to repay the loan, those details are relevant to this case. Consult a military legal assistance attorney through your installation’s JAG office — free legal help is available to service members at no cost.

Does this lawsuit affect non-military TurboTax customers?

 No. The Military Lending Act only protects active-duty service members, qualifying National Guard and Reserve members on orders, and their covered dependents. The lawsuit is limited to that population. Civilian TurboTax users are not covered by the MLA and are not part of this proposed class.

Is Intuit the only defendant, or are the banks also being sued? 

The lawsuit names Intuit Inc., Intuit TT Offerings Inc., CK Progress Inc. d/b/a Credit Karma, MVB Bank Inc., First Century Bank N.A., Santa Barbara Tax Products Group LLC, and Green Dot Bank as defendants. The complaint targets the entire lending and fee structure — not just the TurboTax brand.

Has Intuit responded to the lawsuit? 

No public response from Intuit has been reported at the time of publication. Defendants typically have 21 to 60 days to respond after being served with a complaint. This case is in its earliest stage.

Can I join this lawsuit?

 The class has not been certified yet. You cannot formally join at this stage. If the court certifies a class, members will be notified. If you want to speak with an attorney about your individual situation, the plaintiff is represented by Victor J. Sandoval and David S. Almeida of Almeida Law Group LLC and Brandon M. Wise and Domenica M. Russo of Peiffer Wolf Carr Kane Conway & Wise LLP.

What could I receive if the lawsuit succeeds? 

Under the MLA, borrowers are entitled to actual damages but not less than $500 for each violation. In a class action context, per-person payouts depend on the number of class members, the specific violations established, and any settlement or judgment amount negotiated or awarded. No figures are available at this stage.

What if my loan contract had an arbitration clause — does that mean I can’t sue? 

Not under the MLA. A mandatory arbitration clause in a loan contract with a covered military borrower is itself a violation of federal law — and the MLA renders such a clause void and unenforceable. The existence of an arbitration clause does not block you from pursuing your rights under the MLA in court.

Sources & References

• Case docket: Bostick v. Intuit Inc., et al., Case No. 3:26-cv-01444, U.S. District Court, Southern District of California
• CFPB — Military Lending Act explainer: consumerfinance.gov
• CFPB consumer complaint line: consumerfinance.gov/complaint or (855) 411-2372

Last Updated: April 1, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney. Active-duty service members can access free legal assistance through their installation’s Judge Advocate General (JAG) office.