By Craig Giammona
The issue surrounds H&R Block's “Instant Money Advance Loans.” The loans are supposedly offered by H&R Block based on a customer's anticipated federal tax return. According to Comrie, however, there are two main problems with the program: The money is a personal loan and not tax returns and many customers mistakenly believe the program involves the filing of their tax returns.Not to mention that exorbitant interest rates are charged for the loans, Joshua Rivera, Comrie's chief of staff said Tuesday.”If you walk away thinking you got your taxes done, you're going to get an audit,” Rivera said. “They haven't done your return. It's a loan.”Rivera said Comrie's office has heard the interest rates for the loans are anywhere from “70 to 700 percent.”But H&R Block said Rivera has inaccurate information. “The interest rate is capped at 36 percent,” spokesman Dan Smith said. Smith also provided a statement that said the company's loans are about 40 percent less expensive than cash advances on credit cards.”We look forward to the opportunity to work with Councilman Comrie about how our low-cost loan products are serving as a bridge to help clients establish a year-round bank account and avoid taking costly credit card advances and payday loans in the future,” the statement said.According to H&R Block's Web site, the Instant Money Advance loans up to $2,500 can be obtained in one of the company's tax offices simply by providing a recent pay stub.Comrie also believes that H&R Block's ad campaign for the loan program, which uses the phrase “I Got People,” is deliberately targeting minorities and low-income families.Comrie said the ad campaign employs “insulting urban slang.””African Americans have been prominently featured in the ad campaign and placements have been prominent in communities of color on billboards, buses and storefronts, as well as urban radio and television commercials.”Rivera said the H&R Block issue will be discussed at the Consumer Affairs committee meeting in February. Comrie, who chairs the committee, is also urging low-income tax filers to take advantage of free tax assistance programs.Reach reporter Craig Giammona by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 146.
