The FTC issued warnings to five tax preparation companies against using or disclosing consumer tax data for unrelated purposes like advertising without explicit consent. The agency cites its penalty offense authority, referencing a previous case against Beneficial Corp, and warns that such practices violate the FTC Act and could incur penalties up to $50,120 per violation. The notices highlight that using tracking technologies for data collection without consent is also prohibited.
In-house legal teams should review customer service agreements, privacy policies, and vendor contracts (especially with analytics/advertising partners) for clauses governing data usage purposes, consent requirements, and tracking technology disclosures. Specific clauses to audit include: (1) data purpose limitations ensuring tax data is only used for tax preparation; (2) consent mechanisms for any secondary uses like advertising or data sharing; (3) restrictions on sharing confidential tax information with third parties; (4) transparency requirements for tracking technologies (e.g., cookies, pixels). Updates may be needed to add explicit, granular consent for non-tax purposes, prohibit unauthorized data sharing, and ensure all tracking tools are disclosed with opt-in consent where required. Data processing agreements with vendors should also reflect these restrictions.
Entity
Five tax preparation companies
Also known as: Tax Preparation Companies
Industry
Financial ServicesOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-warns-tax-preparation-companies-about-misuse-consumer-data
NPO Recipients Misuse Information Collected Confidential Con
https://www.ftc.gov/system/files/ftc_gov/pdf/NPO-Recipients-Misuse-Information-Collected-Confidential-Contexts.pdf
NPO Misuse Information Collected Confidential Contexts Cover
https://www.ftc.gov/system/files/ftc_gov/pdf/NPO-Misuse-Information-Collected-Confidential-Contexts-Cover-Letter_0.pdf
Beneficial Corporation Complaint 0
https://www.ftc.gov/system/files/ftc_gov/pdf/Beneficial-Corporation-Complaint_0.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"five tax preparation companies"
"under the FTC Act"
"without first obtaining affirmative express consent from consumers"
The FTC filed a complaint alleging that GovAssist LLC, Entry LLC, and Scott Zuckerman used deceptive paid search ads, misleading service and pricing claims, and fake reviews to deceive consumers seeking passport services. The complaint alleges violations of the FTC Act, the Impersonation Rule, and the Gramm-Leach-Bliley Act; the case will be decided by the court, and no penalty or remedy is reported as imposed.
The FTC issued its annual report to Congress describing fraud trends affecting older adults and the agency’s enforcement, education, and outreach efforts. The report is not a specific privacy enforcement action and announces no penalty or remedy.
The FTC referred a complaint against REPS & Company Inc. and company executives, alleging they bypassed ticket-issuer security controls and purchasing limits to acquire millions of tickets for resale. The complaint was filed by the Department of Justice, and the case will be decided by the court; the press release does not report a penalty or other remedy imposed.
$106.8M
A federal court entered a $106.8 million default judgment against corporate defendants in an alleged debt-relief scheme that impersonated banks and government entities and targeted seniors and veterans. The judgment permanently bans the defendants from the debt-relief industry and imposes additional prohibitions, including on impersonation, telemarketing, and misrepresentations.
The FTC sued Digital Forensics Corporation LLC and affiliated defendants, alleging they misled sextortion victims with promises of investigative and monitoring services that often were not provided, and used fake positive reviews. A federal court granted the FTC’s request to temporarily halt the defendants’ activities; the complaint remains for the court to decide.
The FTC alleged that Greenway Auto Group advertised vehicle prices thousands of dollars below the amounts consumers actually paid and used mailers falsely suggesting recipients had won cash prizes. Greenway agreed to an order requiring transparent pricing and prohibiting deceptive prize mailers and other misrepresentations; the press release does not state a monetary penalty.