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| Supreme Court Rejects H&R Block Appeal in Refund Loan Class Action |
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January 11, 2005
The Supreme Court has refused to hear an appeal from H&R Block, leaving intact a lower court's decision that a class-action case against the tax preparation giant can go forward.
H&R Block
? Charges
? Electronic Filing
? Errors
? "Free" Filing
? Online
? Refund Anticipation Loans
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News
? Class Action Challenges Electronic Filing Fee
? Supreme Court Rejects Block Appeal in Class Action
? Judge Upholds Racketeering Complaints Against H&R Block, Household
? Court Clears Class-Action Suit
? Tax Loans Victimize Consumers
The suit, filed on behalf of as many as 17 million H&R Block customers, contends that Block charged interest rates of more than 100 percent on refund loans and failed to properly inform customers of the finance charges they were paying.
H&R Block and Household International Inc., its banking affiliate, once tried to settle the case for $25 million but a federal appeals court overturned the settlement in 2002, saying that consumers' interests had not been adequately represented.
With the Supreme Court having rejected the company's appeal, the case is now set to go to trial later this year in federal court in Chicago.
The case began in February 1995, when the sole named plaintiff, Lynne A. Carnegie of New York, had a Block office prepare her taxes. Beneficial Finance, now Household International, made the loan in anticipation of her income-tax refund. Carnegie paid $110 for a nine-day refund loan of $500.
Attorneys representing consumers say her case illustrates "the extraordinarily high interest rates and other charges" Block levies on its clients. The suit says the company "preys upon vulnerable, low-income taxpayers." Millions of such loans are made each year for flat fees that equate to annual interest charges of several hundred percent and in some cases reach 2,000 percent.
The companies face potential treble damages that could run to billions of dollars if arguments by the plaintiffs' lawyers prevail in the case, which has been working its way through the courts since the late 1990's.
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