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FTC Warns Five Tax Prep Companies Against Unauthorized Personal Data Usage

S.J. Steinhardt
Published Date:
Sep 21, 2023

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The Federal Trade Commission (FTC) told five tax preparation companies that they could face civil penalties for the use of their customers’ confidential data for unrelated purposes, such as advertising, without first obtaining their consent.

The five firms are H&R Block, Intuit, TaxAct, TaxSlayer and The Lampo Group LLC, d.b.a. Ramsey Solutions. The FTC sent each company a notice of penalty offenses, warning the recipients that they could incur civil penalties of up to $50,120 per violation for the misuse of personal data.

Without consumer approval, the FTC warned, the companies cannot:

● Use information collected in a context where an individual reasonably expects that such information will remain confidential for purposes not explicitly requested by the individual;

● Use such information to obtain a financial benefit that is separate from the benefit generated from providing the product or service requested by the individual; and

● Use such information to advertise, sell or promote products or services.

“Consumers trust tax preparers with sensitive information about their finances, marital status, children, and health,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Companies that violate American’s privacy by seeking to monetize personal data without consent can face significant financial consequences.”

As precedent, the FTC cited its 1975 case against Beneficial Corp., in which the commission found that the company used unfair and deceptive practices by using information collected for prep services for unrelated loan solicitation.

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