A new class action lawsuit accuses Intuit, TurboTax, Credit Karma, and four partner banks of charging active-duty military borrowers fees on “0% interest” refund advance loans that exceeded the legal cap under the Military Lending Act.
The case, Bostick v. Intuit Inc., was filed March 31, 2026, in the U.S. District Court for the Southern District of California (Case No. 3:26-cv-01444).
Why It Matters: The Military Lending Act caps the Military Annual Percentage Rate (MAPR) at 36% for active-duty service members and their dependents. That cap doesn’t just cover the stated interest rate — it includes fees, required insurance premiums, and most other charges tied to the loan. A product advertised as "no interest" or “0% interest” can still exceed the 36% cap if the fees are large enough relative to the loan amount and repayment window.
Plaintiff Zachary Bostick alleges the mandatory fees built into TurboTax’s refund advance product did exactly that. The complaint also claims Intuit required borrowers to waive their right to sue, which itself a separate MLA violation.
The Big Picture: This is the second major tax-refund-advance lawsuit targeting military borrowers in about six weeks. H&R Block was hit with a nearly identical case in February 2026 (Montgomery v. HRB Tax Group, Case No. 3:26-cv-00759, S.D. Cal.). Both lawsuits name partner banks alongside the tax prep companies, and both argue the same thing: fees that appear small in dollar terms become illegally high when annualized over the short life of a refund advance loan.
The defendants in the Intuit case include Intuit TT Offerings Inc., CK Progress Inc. (d/b/a Credit Karma), MVB Bank, First Century Bank, Santa Barbara Tax Products Group, and Green Dot Bank.
What's Next: The case is in its earliest stage. There’s no settlement, no certified class, and no payout timeline. If you’re active-duty or were at the time you took a TurboTax or Credit Karma refund advance, the most important thing to do right now is save your paperwork as proof in case you need it: the loan agreement, fee disclosures, and proof of military status (LES or orders) for each tax year you used the product.
Do not pay anyone to “join” the lawsuit. Legitimate class actions never charge service members a sign-up fee. If someone contacts you asking for money, it’s a scam.
How This Connects: The College Investor has long covered tax refund advance loans, including the TurboTax product at the center of this lawsuit. These products are marketed as free and fast, but the fee structures can be opaque — particularly for borrowers who never see the fees as a separate line item because the cost is deducted before the refund hits their account.
Military borrowers also face unique financial pressures we’ve covered in our student loan help for military borrowers reporting.
It's important to remember that tax refund advances should be a last resort, and most borrowers get their tax refunds within 21 days. Furthermore, you can adjust your tax withholding to NOT get a refund, which will make all of your paychecks bigger all year.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
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