Debt
Jackson Hewitt Gets Jacked
(Saw that headline today on Forbes and couldn’t resist!)
As you know, I am adamantly opposed to any Company who markets products (especially financial products) that harm or take advantage of consumers who don’t know any better. For example, Pay Day Loan brothels (yes, I said brothels) take advantage of people in need of short-term loans by charging interest rates as high as 1,600% (no, that’s not a typo).
Another product that has become increasingly popular is the Tax Refund Anticipation Loan. This loan, offered by companies such as H&R Block and Jackson Hewitt, allows you to walk out with cash in the amount of your anticipated tax return - for a fee. In fact, you don’t even have to complete your return! You can walk in, hand over your last pay stub, and walk out with a loan in the amount of your estimated tax return.
Well, the IRS has finally stepped in to put a stop to this ridiculous business practice. Citing tax fraud as its reason, the IRS has proposed restrictions on tax data used in refund anticipation loans. Basically, the IRS is stating that the tax information you hand over as part of your loan application is not allowed to be used for the purposes of getting a loan. And apparently from the reports coming out today, it seems that many people (and companies) didn’t exactly tell the whole truth on their applications, leaving banks with a huge difference between the amount loaned, and the amount of refund received from the IRS.
I for one am glad this revenue stream has dried up for tax preparers who have used this as a way to create more business. Your tax preparer should not be advertising loans using money you have not yet received. Your bank and tax preparer should be independent so that you can get fair and unbiased information from both. If the tax preparers are too focused on getting you a large refund only so that you can get a bigger loan - and they can get a bigger fee - then fraud is bound to occur.
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7 comments for “Jackson Hewitt Gets Jacked”
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[…] Original post by BeancounterBlog.com […]
There are many ways to defraud the IRS without refund loans. The refund loans made by these companies fully disclose the costs involved. The percentages charged for the loans appear outrageous because of the short term nature of the loan. The dollar amounts are not that much given the risk the bank is taking. The people that do these loans are willing to pay the cost to receive their refund now! I don’t think government intervention will help people see the light. They’ve see the light and still want their money now. It is their right and choice. Who’s to say that their choice is not the best for them?
No checkstub loans being offered this year.
I suppose I believe that taking out these high-interest short-term loans is just one more step to financial ruin. Sure, it’s their right and their own decision… but I believe that when too many people follow down that path, it hurts us all. Economic prosperity is helped along when everyone is doing well - not just those who haven’t fallen into a trap like this.
Here is a look into the smaller fishbowl! As many of their clients already know, Jackson Hewitt has been aiding and abeting fraudulent tax returns providing ways to make their clients thousands of dollars spewing from the US Department of Treasury. I believe this has indeed pushed out large sums of money to people who do not work as hard where the honest tax payers suffer in this rediculous scheme receiving very little or nothing. My point, Jackson Hewitt and the banks involved have increasingly taken advantage of their customers, however, some of their clients are not innocent as well. Many of them LIE to get that bigger refund and JH promotes it!!!
I am a client of Jackson Hewitt and tried to do my taxes with my last pay stub and was told that this was not an option this year. I am very pleased with my service from them. I have been a client with them for many years now. I am very aware of all the fees for a refund anticipation loan they explain it very clearly to me every year. thank you very much Jessica Hanes
I just have to say these people that get these refund anticipation loans know what they r doing. dont blame the tax offices for these people ignorance. they r very aware of the fees nothing is hidden behind close doors for them and they know the system trust me we dont help them out. they walk into theese offices and say one thing and find out it is illegal then turn around and go some where else to file the fraudulant return. i promise you my office will turn down a customer that is trying to file HOH if they r married we dont 250,000 dollars in our back pockets nor do we have the time to do a min of 5 years in prison. so dont put the blame on us thank you dw
ps my income is way over the eic bracket and i dont know how me and my husband survive off of what we make and it just kills me to see someone come in and have only made enough to max out the eic.
i feel that the eic bracket should be raised for the people who r trying to make a living without the goverment.