Jackson Hewitt Tax Service Inc. (fka JHTXQ)

[Doubledown22]

Records keeping procedures of sensitive information is a valid area of concern for businesses like JTX. It looks like the company is already doing their own investigation into what Mr Burnett did and of course they take this sort of incident very seriously. Read the very bottom.
http://www.news4jax.com/topstories/25442389/detail.html
The STORY is about the MAN that made a bonehead decision. Did JTX tell him to dispose of the records in that way?? Nope.

Regardless this was a localized incident involving a FORMER franchisee who made a VERY POOR personal decision. Any scenario can be "what if"fed into some big massive liability. What if this massive scenario you described then spread to all of the companies in the United States who collect and store private information about their customers. Would JTX be held liable for starting all of this massive investigation? ummm..no.

On the legal aspect, if a former employee or customer wants to sue over this then I would tell them to get in line with all the other folks. JTX keeps plenty of lawyers on retainers as does most big companies who get sued for any and everything that our litigious society can dream up. And if in the off chance the person does win...that is why JTX and their franchisees have insurance of all sorts and types. Unfortunately, lawsuits happen and will happen all the time with service businesses like JTX.

The tax prep industry has plenty of regulation (internal and external) that guides the tax preparers on how to handle the collection and storage of their customer's personal information. Much stricter standards and operating procedures than 90% of the other businesses that collect and store the same type of info...i.e. the thousands of payday loan, small credit financing companies, credit card companies, car lots, insurance companies and on and on... Businesses like JTX and HRB have the IRS and Federal Trade Commission shining a flashlight up their tailpipes all the time... Who is doing that to Bubbas Credit Finance Company or Linda's Happy Town Insurance Company down the road? Or maybe the local medical clinic? Noone...except some reporter types after a story...
http://www2.wspa.com/news/2010/jun/29/management-responds-after-sensitive-information-fo-ar-470700/
http://www.csoonline.com/article/484847/a-real-dumpster-dive-bank-tosses-personal-data-checks-laptops
http://www.pinewswire.net/2010/06/medical-records-found-in-dmvs-dumpster/

Oh and now the IRS is making the tax prep industry meet minimal training standards and certifications for the employees.
http://www.theincometaxschool.com/1626/operating-tax-business/a-special-alert-from-natp-issued-today
http://www.theincometaxschool.com/1564/tax-prearer-regulations/new-online-registration-system-for-paid-tax-return-preparers-is-now-available
That's fine but again who is doing that to all of the industries described above?? Who is checking the IRS employees for competency and training when they hire the thousands of temporary workers for tax season every year...oh that's right? Noone.

This will be a critical year for JTX and each move it makes will be very very important for it's financial future.

I'm already in the stock. Only time can tell if that is a wise decision.

Thanks for your contribution to the board,

DD22