Lawmakers put the brakes on Rapid Refund
Friday, March 2nd 2001, 12:00 am
By: News On 6
A federal judge told H & R Block to stop advertising its "Rapid Refund" because customers don't realize what they're actually getting is a high interest loan. Refund loans are a booming business, but as KOTV's Emory Bryan reports, they can be bad for the bottom line.
With tax season in full swing, many people are waiting on a refund. At H & R Block, the promise of a "Rapid Refund", according to a federal judge, was misleading and deceptive. Steven Dow, Community Action Project in Tulsa says, "lots of tax filers who take advantage of the rapid refund program do not understand they are getting a rapid refund, but it is a very high interest rate loan." And with free tax preparation and electronic filing available, through groups like the Community Action Project, tax refund loans are an expensive alternative. "And our families are receiving their refunds within 10 days, direct to their bank accounts."
A judge in Virginia ordered H & R Block to stop advertising same day refunds without mentioning the fact it's a loan. Mark Ernst, H & R Block CEO says, "This is a hometown judge who has taken a position on behalf of a local business owner who didn't like the fact that an outside company was having great success at that local company's expense."
The Better Business Bureau of Tulsa urges caution for consumers looking at any rapid refund service - now that IRS refunds come so quickly. Rick Brinkley, Better Business Bureau says, "It's just a matter of days before you get your check, in this case, the judge said some people were paying up to 500% interest"