FTC Warns Tax Preparation Firms About Consumer Data Collection Practices

Five tax preparation companies could face civil penalties if they use or disclose confidential data collected from consumers for other unrelated purposes, such as advertising, without obtaining their consent, said the agency Monday. Violators could incur civil penalties of up to $50,120 per instance if they misuse personal data in ways that aren't the original purpose for which the information was collected, the agency said. To remind tax preparers of the law, the FTC is using its penalty offense authority, which allows it to seek civil penalties against a company that engages in conduct it knows is unlawful and that has been found unlawful in a previous FTC administrative order, other than a consent order, it said. The notices detail practices found to be a violation of the FTC Act in a case against Beneficial Corp. in which the FTC found the company used information collected for tax preparation for unrelated loan solicitation purposes.