Today's links
- Intuit: "Our fraud fights racism": Apparently, ripping off Black people with the Freefile scam is a form of reparations.
- Hey look at this: Delights to delectate.
- This day in history: 2003, 2013, 2028, 2022
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
Intuit: "Our fraud fights racism" (permalink)
Today's key concept is "predatory inclusion": "a process wherein lenders and financial actors offer needed services to Black households but on exploitative terms that limit or eliminate their long-term benefits":
https://journals.sagepub.com/doi/10.1177/2329496516686620
Perhaps you recall predatory inclusion from the Great Financial Crisis, when predatory subprime mortgages with deceptive teaser rates were foisted on Black homeowners (who were eligible for better mortgages), resulting in a wave of Black home theft in the foreclosure crisis:
https://prospect.org/justice/staggering-loss-black-wealth-due-subprime-scandal-continues-unabated/
Before these loans blew up, they were styled as a means of creating Black intergenerational wealth through housing speculation. They turned out to be a way to suck up Black families' savings before rendering them homeless and forcing them into houses owned by the Wall Street slumlords who bought all the housing stock the Great Financial Crisis put on the market:
https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords
That was just an update on an old con: the "home sale contract," invented by loan-sharks who capitalized on redlining to rip off Black families. Back when banks and the US government colluded to deny mortgages to Black households, sleazy lenders created the "contract loan," which worked like a mortgage, but if you were late on a single payment, the lender could seize and sell your home and not pay you a dime – even if the house was 99% paid for:
https://socialequity.duke.edu/wp-content/uploads/2019/10/Plunder-of-Black-Wealth-in-Chicago.pdf
Usurers and con-artists love to style themselves as anti-racists, seeking to "close the racial wealth gap." The payday lending industry – whose triple-digit interest rates trap poor people in revolving debt that they can never pay off – styles itself as a force for racial justice:
https://pluralistic.net/2022/01/29/planned-obsolescence/#academic-fraud
Payday lenders prey on poor people, and in America, "poor" is often a euphemism for "Black." Payday lenders disproportionately harm Black families:
https://ung.edu/student-money-management-center/money-minute/racial-wealth-gap-payday-loans.php
Payday lenders are just unlicensed banks, who deploy a layer of bullshit to claim that they don't have to play by the rules that bind the rest of the finance sector. This scam is so juicy that it spawned the fintech industry, in which a bunch of unregulated banks sprung up to claim that they were too "innovative" to be regulated:
https://pluralistic.net/2023/05/01/usury/#tech-exceptionalism
When you hear "Fintech," think "unlicensed bank." Fintech turned predatory inclusion into a booming business, recruiting Black spokespeople to claim that being the sucker at the table in the cryptocurrency casino was actually a form of racial justice:
But not all predatory inclusion is financial. Take Facebook Basics, Meta's "poor internet for poor people" program. Facebook partnered with telcos in the Global South to rig their internet access. These "zero rating" programs charged subscribers by the byte to reach any service except Facebook and its partners. Facebook claimed that this would "bridge the digital divide," by corralling "the next billion internet users" into using its services.
The fact that this would make "Facebook" synonymous with "the internet" was just an accidental, regrettable side-effect. Naturally, this was bullshit from top to bottom, and the countries where zero-rating was permitted ended up having more expensive wireless broadband than the countries that banned it:
The predatory inclusion gambit is insultingly transparent, but that doesn't stop desperate scammers from trying it. The latest chancer is Intuit, who claim that the end of its decade-long, wildly profitable "free tax prep" scam is bad for Black people:
https://www.propublica.org/article/turbotax-intuit-black-taxpayers-irs-free-file-marketing
Some background. In nearly every rich country on Earth, the tax authorities send every taxpayer a pre-filled tax return, based on the information submitted by employers, banks, financial planners, etc. If that looks good to you, you just sign it and send it back. Otherwise, you can amend it, or just toss it in the trash and pay a tax-prep specialist to produce your own return.
But in America, taxpayers spend billions every year to send forms to the IRS that tell it things it already knows. To make this ripoff seem fair, the hyper-concentrated tax-prep industry, led by the Intuit, creators of Turbotax, pretended to create a program to provide free tax-prep to working people.
This program was called Free File, and it was a scam. The tax-prep cartel each took a different segment of Americans who were eligible for Freefile and then created an online house of mirrors that would trick those people into spending hours working on their tax-returns until they were hit with an error message falsely claiming they were ineligible for the free service and demanding hundreds of dollars to file their returns.
Intuit were world champions at this scam. They blocked their Freefile offering from search-engine crawlers and then bought ads that showed up when searchers typed "freefile" into the query box that led them to deceptively named programs that had "free" in their names but cost a fortune to use – more than you'd pay for a local CPA to file on your behalf.
The Attorneys General of nearly every US state and territory eventually sued Intuit over this, settling for $141m:
https://www.agturbotaxsettlement.com/Home/portalid/0
The FTC is still suing them over it:
https://www.ftc.gov/legal-library/browse/cases-proceedings/192-3119-intuit-inc-matter-turbotax
We have to rely on state AGs and the FTC to bring Intuit to justice because every Intuit user clicks through an agreement in which we permanently surrender our right to sue the company, no matter how many laws it breaks. For corporate criminals, binding arbitration waivers are the gift that keeps on giving:
https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks
Even as the scam was running out, Intuit spent millions lobby-blitzing Congress, desperate for action that would let it continue to privately tax the nation for filling in forms that – once again – told the IRS things it already knew. They really love the idea of paying taxes on paying your taxes:
https://pluralistic.net/2023/02/20/turbotaxed/#counter-intuit
But they failed. The IRS has taken Freefile in-house, will send you a pre-completed tax return if you want it. This should be the end of the line for Intuit and other tax-prep profiteers:
https://pluralistic.net/2023/05/17/free-as-in-freefile/#tell-me-something-i-dont-know
Now we're at the end of the line for the scam, Intuit is playing the predatory inclusion card. They're conning Black newspapers like the Chicago Defender into running headlines like "IRS Free Tax Service Could Further Harm Blacks,"
https://defendernetwork.com/news/opinion/irs-free-tax-service-could-further-harm-blacks/
The only named source in that article? Intuit spokesperson Derrick Plummer. The article went out on the country's Black newswire Trice Edney, whose editor-in-chief did not respond to Propublica's Paul Kiel's questions.
Then Black Enterprise got in on the game, publishing "Critics Claim The IRS Free Tax Prep Service Could Hurt Black Americans." Once again, the only named source for the article was Plummer, who was "quoted at length." Black Enterprise declined to tell Kiel where that article came from:
For Intuit, placing op-eds is a tried-and-true tactic for laundering its ripoffs into respectability. Leaked internal Intuit memos detail the company's strategy of "pushing back through op-eds" to neutralize critics:
https://www.documentcloud.org/documents/6483061-Intuit-TurboTax-2014-15-Encroachment-Strategy.html
Intuit spox Derrick Plummer did respond to Kiel's queries, denying that Intuit was paying for these op-eds, saying "with an idea as bad as the Direct File scheme we don’t have to pay anyone to talk about how terrible it is."
Meanwhile, ex-NAACP director (and No Labels co-chair) Benjamin Chavis has used his position atop the National Newspaper Publishers Association to publish op-eds against the IRS Direct File program, citing the Progressive Policy Institute, a pro-business thinktank that Intuit's internal documents describe as part of its "coalition":
https://www.documentcloud.org/documents/6483061-Intuit-TurboTax-2014-15-Encroachment-Strategy.html
Chavis's Chicago Tribune editorial claimed that Direct File could cause Black filers to miss out on tax-credits they are entitled to. This is a particularly ironic claim given Intuit's prominent role in sabotaging the Child Tax Credit, a program that lifted more Americans out of poverty than any other in history:
https://pluralistic.net/2021/06/29/three-times-is-enemy-action/#ctc
It's also an argument that can be found in Intuit's own anti-Direct-File blog posts:
The claim is that because the IRS disproportionately audits Black filers (this is true), they will screw them over in other ways. But Evelyn Smith, co-author of the study that documented the bias in auditing says this is bullshit:
That's because these audits of Black households are triggered by the IRS's focus on Earned Income Tax Credits, a needlessly complicated program available to low-income (and hence disproportionately Black) workers. The paperwork burden that the IRS heaps on EITC recipients means that their returns contain errors that trigger audits.
As Smith told Propublica, "With free, assisted filing, we might expect EITC claimants to make fewer mistakes and face less intense audit scrutiny, which could help reduce disparities in audit rates between Black and non-Black taxpayers."
Meanwhile, the predatory inclusion talking points continue to proliferate. Nevada accountants and the state's former controller somehow coincidentally managed to publish op-eds with nearly identical wording. Phillip Austin, vice-chair of Arizon's East Valley Hispanic Chamber of Commerce, claims that free IRS tax prep "would disproportionately hurt the Hispanic community." Austin declined to tell Propublica how he came to that conclusion.
Right-wing think-tanks are pumping out a torrent of anti-Direct File disinfo. This surely has nothing to do with the fact that, for example, Center Forward has HR Block's chief lobbyist on its board:
The whole thing reeks of bullshit and desperation. That doesn't mean that it won't succeed in killing Direct File. If there's one thing America loves, it's letting businesses charge us a tax just for dealing with our own government, from paying our taxes to camping in our national parks:
https://pluralistic.net/2022/11/30/military-industrial-park-service/#booz-allen
Interestingly, there's a MAGA version of predatory inclusion, in which corporations convince low-information right-wingers that efforts to protect them from ripoffs are "woke." These campaigns are, incredibly, even stupider than the predatory inclusion tale.
For example, there's a well-coordianted campaign to block the junk fees that the credit card cartel extracts from merchants, who then pass those charges onto us. This campaign claims that killing junk fees is woke:
https://pluralistic.net/2023/08/04/owning-the-libs/#swiper-no-swiping
How does that work? Here's the logic: Target sells Pride merch. That makes them woke. Target processes a lot of credit-card transactions, so anything that reduces card-processing fees will help Target. Therefore, paying junk fees is a way to own the libs.
No, seriously.
Hey look at this (permalink)
- Google Erects Cone of Silence Around Antitrust Case https://prospect.org/justice/2023-09-26-google-erects-cone-of-silence-around-antitrust-case/
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‘We do not have fast companies anymore’: where tech went wrong, and how to fix https://www.fastcompany.com/90956618/we-do-not-have-fast-companies-anymore-cory-doctorow-on-where-tech-went-wrong-and-how-to-fix-it
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Amazon Is the Apex Predator of Our Platform Era https://www.nytimes.com/2023/09/27/opinion/amazon-ftc-antitrust-monopoly.html
This day in history (permalink)
#20yrsago Feds snooping on Scotch distilleries for fear of chemical weapons conversions https://web.archive.org/web/20031008174312/http://www.thescotsman.co.uk/index.cfm?id=1070422003
#10yrsago Insurance industry pricing climate risk as a dead certainty https://www.nytimes.com/2013/05/15/business/insurers-stray-from-the-conservative-line-on-climate-change.html
#5yrsago Guy recreates Disneyland’s Fantasyland in his basement https://www.youtube.com/watch?v=bZc6Aslo8Qc
#5yrsago Lies programmers believe about calendars https://yourcalendricalfallacyis.com
#5yrsago Detailed look at Google’s secret, censored, spying Chinese search tool https://www.bbc.com/news/technology-45653035
#5yrsago Leaked video reveals Amazon’s union-busting playbook https://gizmodo.com/amazons-aggressive-anti-union-tactics-revealed-in-leake-1829305201
#5yrsago Hate-speech detection algorithms are trivial to fool https://arxiv.org/pdf/1808.09115.pdf
#5yrsago Whatsapp founder: I sold out, but I walked away from $850,000,000 when I quit Facebook https://www.forbes.com/sites/parmyolson/2018/09/26/exclusive-whatsapp-cofounder-brian-acton-gives-the-inside-story-on-deletefacebook-and-why-he-left-850-million-behind/amp/
#5yrsago CBS smashes fans’ virtual, noncommercial recreation of the USS Enterprise https://torrentfreak.com/cbs-shuts-down-stage-9-a-fan-made-recreation-of-the-uss-enterprise-180927/
#5yrsago UK Tories created a secret anti-Corbyn Twitter army, which promptly attacked Theresa May https://www.buzzfeed.com/alexspence/these-leaked-messages-show-how-tory-hq-used-a-twitter-army
#1yrago Federalist Society v Corporate Personhood: Corporations don't have First Amendment rights except when they're making political donations, refusing to bake cakes, or blocking birth control https://pluralistic.net/2022/09/27/freeze-peach/#paxton
Colophon (permalink)
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"Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.
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"Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
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The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024
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Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025
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Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025
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