Intuit, creator of popular tax-filing software TurboTax, is facing a devastating class action lawsuit over rampant fraud and identity theft against people who used its TurboTax software to file their tax returns. The fraud also affected people who did not use the software but had refunds filed by fraudsters using the popular tax package.
The reports highlight two growing trends: theft of user data and companies being held to account for mishandling such data.
Intuit was notified by tax authorities from several states when they detected a large number of suspicious filings from TurboTax users This caused the company to halt state filing and then federal filings for a few days. The situation triggered an investigation by the FTC and DOJ.
The company is now being sued by high profile lawyers representing Christine Diaz and Michelle Fugatt, two victims of identity theft caused by hacks against the tax software compny.
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 early last 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 and collect unauthorized refunds in the victims’ names.
The complaint details 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.”
The filing goes on to state that Intuit should be held responsible for protecting sensitive customer data, especially in light of the fact that the TurboTax website promises that “all TurboTax platforms offer a secure, easy-to-use experience.”
The lawyers claim that despite the promise of a secure platform, TurboTax security was poor until it was too late.
The lawyers representing the pair are looking to establish 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 returns filed in their name through TurboTax.