A class action lawsuit has been filed against H&R Block on the allegation that H & R Block, Household Bank and Beneficial National Bank misrepresent the terms of their refund anticipation loans (RALs) which often carry an interest rate as high as 800 percent. The action, filed in the Madison, Illinois, county court, claims that the defendants bait consumers with low fees and then switch. The bait and switch allegedly involves consumers who file tax returns electronically through H&R Block’s rapid refund program. Consumers are required to file their returns electronically to obtain an RAL, but the RAL application does not disclose the cost of electronic filing. The cost of the RAL is disclosed when the consumer receives a refund check, usually three to five days after applying for the RAL, according to the complaint. The electronic filing fee ranges from $25 to $95 and could triple the RAL’s cost. RAL borrowers also must pay loan document preparation fees, administrative fees and other surcharges to H&R Block. The plaintiff claims these are undisclosed finance charges. The class includes any H&R Block customer who has received an RAL loan since 1987.
Complaint filed is available here: H&RBlockcomplaint.pdf