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Class Action Filed Against H&R Block over Loan Fees

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A federal class action lawsuit has been filed against H&R Block and its affiliates and subsidiaries H&R Block Services, HRB Tax Group, H&R Block Enterprises, and H&R Block Eastern Enterprises. The lawsuit claims H&R Block “aggressively” markets tax-refund anticipatory loans at “exorbitant triple-digit interest rates to working poor and minorities” with “finance charges, what when properly calculated in accordance with the Truth in Lending Act, often exceed 100 percent APR,” Courthouse News reported.

Anthony Johnson and Phyllis Robinson, two named plaintiffs in the class action lawsuit, say that H&R Block did not provide “any disclosures regarding the APR or finance charges,” regarding the refund anticipation loans. The complaint also states, “…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 complaint continues, “The Department of Treasury has determined that RAL [refund anticipation loan] usage is highly concentrated in poor and minority communities. Across the U.S., just 20 percent of all communities account for nearly 70 percent of all RALs. Defendant and other tax preparers target these high-interest-rate loans to minorities and the working poor, particularly those who receive the Earned Income Tax Credit (EITC). The median adjusted gross income among RAL consumers is $19,768. In 2008, although only 17 percent of tax filers received the EITC, EITC claimants comprised 64 percent of RAL consumers. Viewed another way, 33 percent of EITC claimants purchased a RAL, compared to only 3 percent of non-EITC claimants.”

The lawsuit says that the loans are loaded with finance charges but that Block “provides no disclosure of the triple-digit interest rate or finance charge for these transaction.” Stephanie Simonson, spokeswoman for H&R Block, said she could not comment on the case, but did say that the company “acted in accordance with all applicable laws and regulations governing our products.”

The class action lawsuit seeks disgorgement, compensatory, and statutory damages.

 

 

breakinglawsuitnews.com disclaimer: This article: Class Action Filed Against H&R Block over Loan Fees was posted on Tuesday, November 22nd, 2011 at 8:00 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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