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Angry customers are being vocal about TurboTax's new product activation scheme, charging that the technology adds monitoring software and makes the venerable product less useful. Intuit, however, denies the spyware accusations and calls activation necessary to deter piracy.

Chief among customer complaints to PCWorld.com: The appearance on users' PCs of a second program, called SafeCast, after TurboTax installs. Speculation on message boards such as Spywareinfo.com has led some users to believe that the second program is tracking and reporting their online activity. Advertisers sometimes employ such spyware.

Fighting Piracy

But SafeCast is a MacroVision product that Intuit built into TurboTax to enable product activation, says Scott Gulbransen, Intuit's manager of corporate communications. It is not spyware, he says. It's there to fight piracy, to ensure that a single copy of TurboTax isn't passed around and installed on numerous systems.

When a customer installs the software and enters the included product key, SafeCast acquires some basic data about the PC and sends it to Intuit over the Internet. The company's server generates a key based on that data and sends it back to the PC, activating the program on that system.

"It doesn't capture any personal information, nor does it monitor or report back," he says. "No personal information is shared, and SafeCast does not monitor usage." The program will not contact Intuit again after product activation, he adds.

TurboTax owners uncomfortable with having SafeCast on their PC can remove it. However, if you remove SafeCast you also deactivate TurboTax and can no longer use the program. (Intuit has a 60-day money-back policy.) The company offers online instructions and a special uninstaller program to remove SafeCast in a product activation section.

Product activation is not required on Macintosh versions of TurboTax, only on Windows versions for federal taxes, which account for the vast majority of Intuit's sales.

Activation Error

Some users have expressed frustration over TurboTax's product activation for another reason: It doesn't always work.

Gulbransen acknowledges that a small quantity of people are running into problems during the product activation process.

"Yes, with the various versions [of TurboTax] and the millions of different PC configurations out there, we have encountered some problems. But it's a very small number," he says.

He estimates that fewer than 2 percent of buyers encounter issues. "About 98 percent of people who do product activation on the Internet experience no problems," he says. The remaining 2 percent consists of people who call in to activate the product, or run into snags.

For those who do encounter problems, the company has posted a handful of activation error solutions on its site, and is working with customers to handle other problems that arise, he says.

Single-PC Program

Beyond their privacy concerns about the product activation technology, many customers complain that requiring product activation limits the usefulness of the 19-year-old TurboTax.

"I have been a user of both TurboTax and Quicken since they were first released," says Jack Wilson of Papillion, Nebraska, in an e-mail message to PCWorld.com. "The current TurboTax activation and restrictions on use are totally beyond belief."

Wilson says it is impractical to force paying customers to restrict their usage to a single machine, and he's worried about being able to access his tax files on future PCs in years to come.

Jim Samuel of Upper Holland, Pennsylvania, has a similar gripe. "I installed the product on my notebook PC, then decided that preparing taxes on a notebook keyboard is a bad idea," he says. He planned to install the software on his desktop and then uninstall it from his notebook. But the program wouldn't allow him to do so.

"The installation would not let me install a fully functioning program on my desktop PC," he says. "Online chats with Intuit told me that the policy was hard and fast, with no exceptions."

You can print, electronically file, or save your taxes to PDF only from the activated computer, but you can install the program on a second PC to view and make changes to your existing TurboTax documents, Intuit's Gulbransen says. You can also use your activated copy to create and file multiple tax returns--from the same PC, he says.

Customers need not worry about being able to install and access this year's TurboTax on future PCs, he adds. After October 16--the last day to file amended or extended personal returns--the product activation limitations end, he says.

And while it is true you can't activate the same copy on multiple PCs now, you do not have to buy a new copy if you get a new system, Gulbransen says. "We have rules that let you reinstall on a new PC," he says. "For example, if you lose your notebook you just have to contact us, and we'll get you a new code."

One PCWorld.com reader claims otherwise in an e-mail, however.

"I got a new PC for Christmas, but had already installed Turbo Tax on the old computer," says Bob Andrews of Walnut Creek, California. "I called customer service to inquire about how to re-register the software on the new computer. I was advised that the only way to do this was to buy another copy of TurboTax."

Because Andrews called shortly after the product shipped, he was given erroneous information, according to Gulbransen. Now, all tech support personnel are up to speed on the rules, and a customer can reactivate the software on a new PC, he says.

No Apologies

Despite the apparent backlash from users, Intuit executives aren't having second thoughts about the product activation. "All we're trying to do is make sure the product is used in the manner of the licensing agreement," Gulbransen says.

The company sold about 5.5 million copies of its desktop software last year, and another 2.4 million Web-based versions were accessed. The company won't give specific numbers but estimates that literally millions of people have used the software illegally.

"It was time to protect our intellectual property," Gulbransen says. Intuit has considered using product activation for some time, but opted to wait until the technology matured. Its first widespread use was Microsoft's implementation in Windows XP and Office XP. Criticism of the plan forced that company to scale back the product activation technology in Windows XP.

As TurboTax is the first major consumer product to implement product activation since Windows and Office, Intuit expected customer complaints.

"We were ready," Gulbransen says. "But it's largely a vocal minority with a technical background who have strong opinions about this. We listen to them, and we're responding; but we knew that there would be some who are philosophically opposed to digital rights management."

Regardless of the reaction, company executives are convinced it's the right thing to do. "We're doing the right thing for Intuit, its customers, and its shareholders," Gulbransen says. And the company is listening to what its customers have to say so that it can make product activation work better next time around.

"We're not just saying 'get used to it.' We're listening, and we'll improve the process," he says.

However, not all TurboTax customers plan to be there the next time.

"I have been a TurboTax user for 13 or 14 years," customer Andrews says. "But beginning this year, I will buy a competitor product, now and in the future. I think they may have outsmarted themselves this year."

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