The Federal Trade Commission (FTC) has issued a warning to five major tax preparation companies, cautioning them against the unauthorized use of consumer data. The companies, including H&R Block, Intuit, TaxAct, TaxSlayer, and Ramsey Solutions, could face civil penalties if they use or disclose confidential data collected from consumers for purposes unrelated to tax preparation without obtaining consumers' consent.

The FTC's warning comes as a result of concerns about the misuse of sensitive consumer data for purposes such as advertising. The companies could potentially face civil penalties of up to $50,120 per violation. However, it is important to note that appearing on the FTC's list does not imply an admission of guilt by the companies.

In addition to unauthorized data use, the FTC also emphasized that making false or misleading statements regarding the confidentiality of consumer data is unlawful. The companies were specifically cautioned against employing tracking technologies, such as pixels or cookies, for data gathering without explicit consent from consumers.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, highlighted the seriousness of unauthorized data use. In a press release dated September 18, 2023, Levine stated, "Misusing sensitive consumer data not only breaches trust but also opens companies up to hefty financial penalties."

The FTC outlined several unlawful practices under the FTC Act, including using confidential information for purposes not explicitly consented to by the consumer, leveraging the data for unrelated monetary gains, and using the data for the promotion or sale of unrelated products or services.

The warning serves as a reminder to major tax preparation firms to prioritize consumer privacy and to obtain explicit consent before using or disclosing sensitive consumer data for purposes unrelated to tax preparation. Failure to comply with these regulations could result in significant financial penalties for the companies involved.