Intuit sued in TurboTax flap

A Los Angeles lawyer files a class-action suit claiming Intuit defrauded consumers with its imposition of controversial antipiracy technology.

David Becker Staff Writer, CNET News.com
David Becker
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David Becker
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A Los Angeles lawyer has initiated a class-action suit charging software maker Intuit with misleading consumers about controversial antipiracy technology in its current TurboTax software.

The complaint, filed earlier this week in Los Angeles Superior Court by the firm of Stanbury Fishelman, seeks class-action status that would cover all U.S. purchasers of TurboTax products for the 2002 tax year. The suit seeks financial compensation for people it says were defrauded by the Mountain View, Calif.-based company.

"Because Intuit's primary offices are in California, we believe that this is the appropriate state to handle any action," said attorney H. Scott Leviant of Stanbury Fishelman.

An Intuit representative said Thursday that the company had not yet received a copy of the suit and therefore could not comment on it.

The suit alleges Intuit engaged in unfair and deceptive business practices by failing to fully disclose the mechanisms and consequences of "product activation," technology Intuit added to TurboTax to tie each copy of the software to a single PC. Widespread customer complaints about the product activation, enabled by Macrovision's SafeCast software, have ranged from concerns that SafeCast surreptitiously stores information on hidden areas of a PC's hard disk to difficulties getting TurboTax to work again if the owner switches hard drives or PCs.

Intuit executives have pledged to eliminate some of the most controversial technical aspects of product activation in future versions of TurboTax.

Leviant said the suit doesn't challenge Intuit's right to use product activation but instead focuses on the way the technology was enacted. "I would say our primary focus at the moment is simply the fact that Intuit did not fully and truthfully disclose to customers material facts about TurboTax, how it operates and what they can expect," he said.

Leviant said the suit was prompted by numerous complaints he heard from friends and in media accounts and his own experiences using TurboTax this year. "I changed computers--I had a screen go out on a laptop just after installing TurboTax," he said. "I went through all the things people have described in trying to get the program reactivated on a new computer."

The suit charges Intuit with engaging in unfair and deceptive business practices, fraud and negligence. It seeks unspecified punitive and compensatory damages, including an order that Intuit return all TurboTax profits to customers and "disgorgement of all other ill-gotten gains."

Leviant said he's interested in hearing from any TurboTax customers with relevant experiences regarding product activation. Correspondents can e-mail him at hsleviant@stanfish.com.