H&R Block Inc. agreed to a $4.85 million settlement with California officials Friday over the way it labels its "refund anticipation loans."
The settlement includes $2.45 million in restitution for California consumers, said Attorney General Jerry Brown.
Block often arranges short-term loans for customers who are awaiting tax refunds. Under the settlement, Block will stop referring to the loans as early tax refunds, the attorney general said.
Block denied any wrongdoing but worked with Brown's office to improve its practices, Brown said. His predecessor, Bill Lockyer, sued the tax-preparation firm in 2006, saying the program carried high interest rates and took advantage of the working poor.
The $2.45 million is to be distributed to customers who received a "refund anticipation loan" or "refund anticipation check" from 2001 to 2007.
Customers will be contacted directly by a settlement administrator, but consumers can also contact the attorney general at P.O. Box 944255, Sacramento 94244-2550 or at http://ag.ca.gov/contact/.
– Dale Kasler
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