Chicago, IL -- (INTERNET WIRE) -- 02/04/2000
The Langone Law Firm filed a class-action lawsuit against H & R Block Tax Services, Inc., and 10 affiliated financial institutions alleging that these entities conspired to illegally and deceptively collect debts from consumers through the use of Refund Anticipation Loans.

According to the complaint, the facts are as follows: on February 1, 1999, Roy D. Carbajal, Jr. went to H & R Block Tax Services to apply for a Refund Anticipation Loan, ("RAL"), also known as a "rapid refund." Although Carbajal’s application for the RAL was denied, H & R Block still processed Carbajal’s tax return and received his refund.

But H & R Block did not give the entire refund to Carbajal. Instead, it first paid one of the affiliated financial institutions approximately $1,500 for a debt allegedly owed by Carbajal. Only after H & R Block ensured that Carbajal did not owe any more money to any of the affiliated financial institutions did it give Carbajal the remainder of his tax refund. "This practice is very deceptive and we believe it violates several federal consumer-protection laws. The fact that respected financial institutions would participate in such a scheme is outrageous," says Chris Langone, one of Carbajal’s attorneys.

Carbajal’s complaint alleges that the Defendants engage in a scheme to deny consumers’ applications for RAL’s if it appears that the consumer owes money to one of the affiliated financial institutions. But H & R Block still processes and receives the consumer’s refund. That way, even though the consumer may dispute the debt or believe it is not owed at all, Defendants can ensure that their alleged co-conspirators are paid. "Consumers who are applying for rapid refunds should be very careful to read all of the fine print and ask questions about who will be receiving money from the tax refund before signing anything," says Joel Dabisch, another of Carbajal’s attorneys.

The lawsuit seeks money damages for all consumers who were denied a RAL and who did not receive their full tax refund because amounts were paid to the 10 affiliated financial institutions. The affiliated financial institutions named in Carbajal’s complaint include: Household International, Mellon Bank (DE) N.A., Greenwood Trust, Bank One, Chemical Bank Delaware, County Bank, River City Bank, First Security Bank, Republic Bank, and Bank of Santa Barbara.