Two California women are plaintiffs in a lawsuit filed in San Francisco federal court accusing Intuit Inc. of failing in its duty to protect its TurboTax customers' private information despite advertising its software as secure. One of the women, who used the TurboTax software to file her taxes online in 2011, said in her lawsuit that TurboTax sent her a $242 bill in 2015 for filing a federal return and returns in four different states.
The other plaintiff alleges she also received a bill from TurboTax, but she had never used the software. The lawyers representing the women hope to expand the lawsuit into a class action because people throughout the country claim that TurboTax exposed their private information to criminals who used the software to file fraudulent returns.
According to the lawsuit, Intuit failed to address fraud with its software and violated California's Unfair Competition Law and Consumer Records Act. Allegedly, Intuit also did not inform victims of security issues.
Data from the Internal Revenue Service show sharp increases in fraudulent online tax returns. From 2010 to 2013, fraudulent filings jumped from 500,000 to nearly 2 million. A statement from Intuit denies that its software exposes its users to fraud. The company intends to defend itself.
A business confronted by a possible class action lawsuit could be exposed to high costs if damages are awarded to plaintiffs. An attorney familiar with the complexities of business litigation concerning product liability or fraud could help a business negotiate a settlement out of court or create a defense strategy when going to trial is necessary.
Source: Forbes, "Intuit Sued Over TurboTax Security And Identity Theft, Class Action Status Sought," Robert W. Wood, April 23, 2015