Tax filing and 'refund anticipation loans'

Tuesday, February 19th 2002, 12:00 am

By: News On 6

As tax season kicks into high gear, we have a consumer warning. It's about the high cost of those tax refund loans. They are called â€˜refund anticipation loansâ€™, and Six in Your Corner reporter Rick Wells meet a single mom who paid the fees and learned an expensive lesson in tax season economics.

Samantha Stokem is a 19-year-old single mom, she's a student at Rogers State University in Claremore, and TJ is her 19-month old. She needed help with her taxes so she went to a Jackson Hewitt Tax Service location near where she shops. â€œI needed my tax refund as soon as possible, to pay bills and for school." She got her refund in about a week like they promised, the people she worked with were nice to her and helpful, her complaint is with the fees she paid to get it done. "I paid $217 in fees including a $60 bank charge." Wells, "A $60 bank charge?" Stokem, "Yes, $60, 'cause I didn't have an account to transfer the money into."

She paid bank fees and other charges Steven Dow of the Community Action project says are excessive. "We have a situation where we have desperate people who are most anxious to get their money and they don't really pay attention to the fact that the fees are so high."

What kind of fees? The Consumer Federation of America says the typical taxpayer who uses services that provide â€˜refund anticipation loansâ€™ charges fees in the hundreds of dollars. A loan application fee, an electronic filing fee, a check cashing for bank fee and a tax preparation fee. $267 in fees to borrow your own money.

A representative for Jackson Hewitt told us no one pays these fees without being told what they are. Samantha Stokem says she was briefed on the fees before she signed the papers, didn't like them but felt obligated cause the paperwork had been completed. She was in a hurry for the money and she learned an expensive lesson. "Now I know, I know I'm going where my aunt goes, or community action project and wait." A wait that could have saved her a couple hundred bucks.

There is free tax help available at several locations. Contact the Community Action Project at one of its Tulsa locations.