Hopefully this article is correct! The office here at EA Schensky has spent countless hours counseling folks on the costs involved in these “free” services to obtain “instant” refunds. The cost to gain access to one’s money a week to ten days earlier than ordinary processing has seemed like usury to us for A LONG TIME! eas
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The National Consumer Law Center and the Consumer Federation of America are predicting that this year’s tax season will be the final one that refund anticipation loans (RAL’s) will be available on a large-scale, nationwide basis.
Consumer advocates have long warned against the use of RALs, arguing that they amount to high-interest loans targeted at low-income taxpayers. RAL providers began falling by the wayside last tax season after the loans became riskier for lenders to provide.
The Internal Revenue Service removed the debt indicator last tax season indicating whether a borrower owed money to the federal government for delinquent taxes, unpaid child support, or delinquent federally funded student loan payments Banking regulators and investors have also put pressure on RAL lenders like Santa Barbara Bank & Trust, HSBC and Republic Bancorp in recent years to quit the business.
H&R Block is offering a “rapid refund” program this year, and though they claim it isn’t a loan and doesn’t charge interest, critics say the expense is hidden within the preparation fee.
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