Income tax information is supposed to be private but privacy is a rare commodity in the Information Age, and a lawsuit charges Facebook parent Meta, Google and tax preparer H&R Block with spying on consumers to build dossiers that generate targeted ads.
The class action lawsuit alleges that the companies participated in a “massive” racketeering operation to use “tracking pixels” to scrape the information from the tax returns of H&R Block customers without their consent.
Tracking pixels are small pieces of code that run in the background of websites, sharing information about users' actions to third parties, in this case allegedly Google and Facebook.
The companies allegedly use the data to build profiles – or “dossiers” – on users, understand consumer behaviors, measure the performance of ad campaigns, and directly send more ads to consumers.
The suit charges that H&R Block's tracking pixels gave the search engines access to confidential information including names, birth dates, Social Security numbers, addresses, incomes, deductions, and refund amounts.
The price of freedom?
The massive loss of personal privacy is the price consumers pay for the "free" information and services the internet provides, experts caution.
"Many of the major online advertising companies are not interested in the data that we knowingly and willingly share. Instead, these parasitic firms covertly track our web-browsing activities, search behavior and geolocation information," said Christopher Soghoian, former principal technologist at the American Civil Liberties Union.
"Once collected, this mountain of data is analyzed to build digital dossiers on millions of consumers, in some cases identifying us by name, gender, age as well as the medical conditions and political issues we have researched online," the suit quotes Soghoian as saying.
Not an unusual practice
The web is a public place and those who use it to transmit personal information do so at great risk to their personal privacy. But in many cases, there are few serious consequences, other than a few pesky advertisements.
But some personal information carries risks if not handled properly. Medical and financial information, if provided to the wrong parties, can negatively affect credit ratings, insurance premiums, job prospects and rental opportunities, to cite a few obvious examples.
While the use of tracking pixels is common, it can be illegal in some cases – and the allegation in this case is that consumers' tax information is protected by law and should not be shared without the user's consent.
H&R Block used language "designed to mislead consumers" in a "vague" consent agreement given to customers. It said the language gave consumers "a false sense of security regarding the transmission of their” tax return information.
The lawsuit was filed in federal district court in San Francisco and seeks class action status.