(06/05/08) If you received a Tax Refund Anticipation Loan, through your tax preparer or otherwise, you may have been charged excessive fees and interest, decceived as to the true costs of the loan, and deprived of the value of your refund.
In March and April of 2006, several law suits have been commenced in several states concerning such loans. It is alleged, among other things, that that these loans are excessively expensive with APRs up to 500%, that they were misleadingly advertised as "advances", and particularly targeted toward low-income consumer who qualified for the Earned Income Tax Credit in order to inflate the loan amounts. It has also been alleged that insufficient disclosures were made as to the nature and duration of such loans, and that illegal kickbacks were paid from lenders to tax preparers for advertising, soliciting, and referring consumers.
