The Federal Trade Commission communicated to five tax preparation companies that they could face penalties of up to $50,120 per violation for the misuse of consumers’ confidential data.
These preparation tax companies were sharing sensitive information such as finance, marital status, number of children and more and monetizing (getting financial benefit) from the taxpayer / client / customer.
The Notice released list the following illegal practices:
- “It is an unfair or deceptive trade practice to use information collected in a context where an individual reasonably expects that such information will remain confidential (‘Confidential Context’) for any purpose not explicitly requested by the individual unless the individual first provides affirmative express consent for such use.”
- “It is an unfair or deceptive trade practice to make false, misleading, or deceptive representations or omissions concerning the use or confidentiality of information collected in a Confidential Context.”
We urge taxpayers to consider the tax preparation company that they might use and consider their history of deceptive or fraudulent marketing and the illicit monetization of sensitive consumer information.