Tax Season 2019 -Paying with Privacy

Published On March 12, 2019 | By Tom Huskerson | Tax Season

A lot of stuff online is free. Too much stuff really. So what are you getting, or giving, when you use a free tax prep services? Let me answer that. You get a free online tax prep and filing. You’re giving up your financial privacy.

Now ask yourself how are these free services making money by giving away free services. They get your financial information for free and turn around and use it to advertise to you.

Credit Karma is one service where you pay with your privacy. Credit Karma Tax has been around since 2017 and is an extension of the credit score website currently being used by nearly 90 million people. The service is free, but not so free. You don’t pay even if your returns requires more complicated IRS forms. But Credit Karma makes money by focusing on you with tailored ads for credit cards and loans. All based your financial life, which includes your tax returns. And yes, you can opt out. And yes, advertising to you based on the financial data you provided is legal.

Kenneth Lin, CEO of Credit Karma Credit openly admits to the business model. According to Lin Credit Karma offered the free service to complete the data needed to determine if a customers is eligible for loans or other financial services. Credit Karma can make hundreds of dollars each time someone accepts an offer for a loan or new credit card. And yes, the more accurately it can target users, the more money it makes. See, this free tax prep thing is all about gathering data.

“We’re gathering information on behalf of the users,” said Lin. “We help consumers find the very best financial services products leveraging the information algorithms on our site.” Credit Karma was once described by Forbes as “Big Brother with benefits.”

So you don’t think we’re picking on Credit Karma you need to understand that they are not the only service using this business model. You can bet that Intuit’s TurboTax and H&R Block are doing something similar.

Credit Karma admits to moving your income data from its free tax prep service to bolster its personal loan business. It is not currently using information about your refund but neither is Credit Karma imposing restrictions on future tax return data. But you can take small comfort in the fact that the IRS prohibits the selling of your tax data without your explicit permission.

So beware. Anytime you surrender information for something free you are no longer the customer, you become the product. In this case you become a target of data driven advertising. Free is not free.

Like this Article? Share it!

About The Author

Tom Huskerson Bio Born in Richmond Virginia Tom Huskerson is a military veteran who settled in California after his discharge. He attended Santa Barbara City College where he began his writing career as a campus reporter. He worked as an intern news reporter for the Santa Barbara News-Press writing feature stories before moving on to San Francisco. At San Francisco State University Tom studied broadcast communications and began to focus on the Internet. He completed his graduate thesis on Internet advertising. Tom was the first student to ever focus on the Internet as a graduate student at San Francisco State University. After graduation he went to work for Zona Research in California’s Silicone Valley. As a research associate Tom supported senior analyst writing on the latest developments in the Internet industry. During the dot com boom Tom worked for several web businesses as a market researcher and analyst. As a writer and researcher Tom has authored various technical works including a training program for Charles Schwab security. Other projects included professional presentations on workplace violence and hiring security contractors. Tom has returned to focus on writing both fiction and non-fiction works and blogging for a travel website. He has published two books of short stories and completed two novels. Tom is the owner of Scribe of Life Literature and EbonyCandle. Most recently Tom has launched the blog African American Cyber Report. The blog is the result of his desire to inform the African American community of the dangers and benefits of the cyber age. In his blog Tom reports on information security, new and analysis, scams and hoaxes, legal happenings and various topics that arise from the age of information. Tom believes that technology is a necessary tool for black people and they should know what is happening. Tom writes believing that techno speak is for the professional and that valuable information can be communicated using plain language. As a result he has embraced the motto, Less Tech, More Knowledge.

Leave a Reply

Your email address will not be published. Required fields are marked *