Intuit Facing Potential Class Action Suit Over TurboTax Security and Identity Theft

Intuit, the maker of tax filing software TurboTax, was contacted by regulatory authorities

Intuit, the creator of popular tax-filing software TurboTax, is having a rough year. The company got off to a bad start when tax authorities from several states detected a large number of suspicious filings from TurboTax users, causing the company to halt state filing and then federal filings for a few days. The mess triggered an investigation by the FTC and DOJ.

The trouble doesn’t stop for Intuit there as as the company is now being sued by high profile lawyers representing Christine Diaz and Michelle Fugatt, both victims of identity theft. The lawyers for the plaintiffs include Richard McCune of McCuneWright in Redlands, California; Michael Sobol of Lieff, Cabraser, Heimann & Bernstein in San Francisco; and John Yanchunis of Morgan & Morgan in Florida.

The lawsuit, which was filed earlier in the week in the Northern District Court of California, alleges that due to lax security protection in TurboTax, identity thieves were able to fraudulently file returns.

The complaint alleges that, “Rather than protecting customers’ personal and financial information by implementing stricter security measures, TurboTax has instead knowingly facilitated identity theft tax refund fraud by allowing cybercriminals easy access to its customers’ most private information.”

Additionally, the complaint goes on to state that Intuit should be held responsible for protecting sensitive customer data, especially considering the fact that the TurboTax website promises that “all TurboTax platforms offer a secure, easy-to-use experience.” The lawyers claim that contrary to that promise of offering a secure platform, TurboTax security was poor until it was too late.

Ms. Diaz tried the online version of TurboTax in 2011 to file her joint return. However, this tax season, prior to filing her tax return, Diaz received a bill for $242 from TurboTax for supposedly filing both a state and federal tax return through the software. The other plaintiff, Ms. Fugatt, has stated that she received a similar bill from TurboTax even though she has never used the software to file her taxes.

The lawyers representing the pair hope to be able to have two class actions suits; one that would represent customers like Diaz who had personal data stolen and the other for non-customers like Fugatt who were victims of fraudulent tax returns filed in their name through TurboTax.

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