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H&R Block Faces Federal Class Action Over Predatory Loans

Santa Monica, CA: H&R Block and its subsidiaries H&R Block Services, HRB Tax Group, H&R Block Enterprises, H&R Block Eastern Enterprises, are facing a federal financial class action lawsuit alleging the national financial services chain targets the working poor and minorities for tax-refund anticipation loans that, combined with Block's "exorbitant" and illegal fees, charge annual interest rates of more than 100 percent.

Plaintiffs in the case, Phyllis Robinson and Anthony Johnson claim that H&R Block "aggressively" markets its loans at "exorbitant triple-digit interest rates to working poor and minorities" with "finance charges, that when properly calculated in accordance with the Truth in Lending Act, often exceed 100 percent APR."

The lawsuit claims that H&R Block failed to provide "any disclosures regarding the APR or finance charges" in preparing the plaintiffs refund anticipation loans. "Although a significant profit source to defendant and other for profit tax preparers, and a fundamental part of their business models, these aggressively marketed bank products provide little to no value to consumers at predatory interest rates and fees, often in conjunction with exorbitant tax preparation fees for straightforward tax filings," the lawsuit states. "Tax filers can usually get their federal tax refund in 8 to 15 days by direct deposit, without getting a loan or paying any extra fees to companies like defendant. The IRS usually issues refunds by check within 21 to 28 days."

The lawsuit also claims that H&R Block includes finance charges, such as administrative and check-processing fees, in its predatory loans, but "provides no disclosure of the triple-digit interest rate or finance charge for these transactions."

The lawsuit alleges that these practices violate California's refund anticipation loan laws, the Truth In Lending Act and California consumer protection laws.

The class seeks disgorgement, compensatory and statutory damages.

H&R Block Consumer Fraud Class Action Legal Help

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Published on Nov-21-11


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