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Meta faces lawsuit for harvesting financial data from tax prep websites

'The Markup' previously reported that some tax prep services had been sending Meta financial information.
Meta (formerly Facebook) corporate headquarters is seen in Menlo Park, California on November 9, 2022. - Facebook owner Meta will lay off more than 11,000 of its staff in "the most difficult changes we've made in Meta's history," boss Mark Zuckerberg said on Wednesday. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)
JOSH EDELSON via Getty Images
Mariella Moon
Mariella Moon|@mariella_moon|December 3, 2022 5:04 AM

A group of anonymous plaintiffs who filed their taxes online in 2020 using H&R Block has sued Meta, accusing the company of violating users' trust and privacy. If you'll recall, a recent Markup investigation revealed that H&R Block, along with other popular tax-filing websites like TaxAct and TaxSlayer, have been sending users' sensitive financial information to Meta through its Pixel tracking tool. 

Pixel is a piece of code companies can embed on their websites so they can track visitors' activities and identify Facebook and Instagram users to target with ads. Apparently, the aforementioned tax prep websites had been transmitting personal information, such as income data, filing statuses, refund amounts and dependents' tuition grants, to Meta through that code. The tax-filing services had already changed their Pixel settings to stop sending information or had been reevaluating how they used Pixel by the time Markup's report came out. 

In a statement sent to Engadget when the news first came out, Meta said that advertisers are prohibited from sharing personal information and that it uses an automated system that can filter out sensitive content sent through Pixel. The plaintiffs acknowledged in their complaint (PDF, courtesy of The Markup) that Meta does require businesses that use Pixel to "have lawful rights to collect, use and share" user data before providing the company with any information. However, the plaintiffs argue that Meta makes no effort to enforce that rule and instead relies on a "broken honor-system" that has resulted in "repeated, documented violations."

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According to The Markup, the lawsuit is seeking class action status for people who used the tax prep services mentioned in the publication's report. The services themselves, however, were not named as defendants in the case. 

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Meta faces lawsuit for harvesting financial data from tax prep websites