H&R Block loses Refund Anticipation Loan, scrambles for replacem - News, Weather, Sports, Toledo, OH

Don't Waste Your Money: H&R Block loses Refund Anticipation Loan, scrambles for replacement

By John Matarese - bio |email

(WTOL) - There are some big changes this year for many taxpayers who have been going to H&R Block for years as the will not be offering its standard refund loans this year. 

H&R Block became the nation's number one tax preparer in part thanks to its Refund Anticipation Loans, formerly referred to as "Rapid Refunds," that give you your tax refund within 48 hours.

Mary Maxon of Springdale, Ohio signed up every year for a refund loan, even though she knew she she was paying a ton in interest to get that money fast. 

Mary said "I paid anywhere from 15% to 20% percent depending on how much I was getting back. There were times it was $300, $400, $500 to get your refund back." 

But this year Mary and thousands of other local Block customers will not be able to get a Refund Anticipation Loan, or RAL. 

The government recently ordered block's lender, HSBC, to stop giving the loans.

H&R Block says it is offering alternate services this year. 

Among them:

  • A $1,000 cash advance on its Emerald Debit Cards this month.
  • Customers can also get a "Refund Anticipation Check."

But the company admits those checks will take 8 -10 days to cash, the same amount of time it takes the IRS to Direct Deposit your refund.  They are not the same thing as RAL's. 

Still want the traditional Refund Anticipation Loan? Other preparers likeJackson Hewitt and Instant Tax will continue to offer them, though all have tightened their lending standards, and not everyone may qualify.

Mary told me she skipped the refund loan last year, and e-filed through the IRS's website instead, at IRS.gov (CLICK HERE) and was surprised how quickly the IRS sent her refund with no extra fees. 

Mary said "the first time was about 4 days. The average is 7 to 10, but it goes right in. You choose what account it goes into, it's so safe." 

So remember: if you wait two more weeks, and you can get your refund direct from the IRS with no additional charges or interest. 

And that way this bad news could be a good thing for thousands of local people so you don't waste your money.

Watch John Matarese's Don't Waste Your Money reports Monday, Wednesday and Friday on WTOL 11 News at 5.

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