Thoughts on "Instant Refunds"

[SuperWonk]

How can you tell tax season is close? The vultures are out....

Every time I see an ad for "instant tax refunds" I feel a little ill, because I know somewhere, somehow, someone that can not afford to do it is getting a refund anticipation loan from HSBC c/o H&R Block, or somesuch.

Where is the outrage, people?

I cite this example:

Beware Of Instant Refunds Offered By Tax Preparation Companies

http://www.ksdk.com/news/news_article.aspx?storyid=92936

[kick-ass-bob]

1. That is such a fucking racket.

I got my refund in 7 working days.

Good Lord. :eyes:

[ThomCat]

3. It is a racket.

They get all kinds of fees, interest, surcharges and you get your money one day sooner?

It's a scam, pure and simple.

[AllegroRondo]

2. California is suing H&R Block over this

because of the incredbly high interest rates involved.

[SuperWonk]

4. Exactly -

And who do you think is behind H&R Block?
Megaback HSBC...

[AllegroRondo]

5. Have you heard H&R Block had to restate their 2002 earnings?

they made some mistakes with their taxes. True story.

[tjwmason]

9. Meantimes - here's what's happening at H.S.B.C.

HSBC lists record profit for a UK clearer
By Katherine Griffiths, City Correspondent (Filed: 07/03/2006)


Britain's largest bank HSBC followed its smaller rival HBOS to emphasise the importance of its UK banking business, vowing to spend £400m in 2006 on opening new branches and revamping old ones.

HSBC, which operates in 77 countries around the world and is the most internationally diversified of Britain's major banks, said it would open 50 branches throughout the UK this year.

-SNIP-

HSBC yesterday announced an 11pc increase in annual pre-tax profits to $21bn (£12bn) - the largest ever profits reported by a British bank.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/03/07/cnhsbc07.xml&menuId=242&sSheet=/portal/2006/03/07/ixportal.html

[SuperWonk]

10. Interesting read...

Could they be doing so well because of all the money they have collected through such predatory practices as RALs? This should be an easy one to answer.

[tjwmason]

11. I think that their record-breaking profits require

something beyond that - but it looks like their international division (which includes the U.S.) isn't exactly doing badly at the moment.

[Mizmoon]

6. back in the olden days

when it took like 6 to 8 weeks to get your refund, it made some sense for some poorer people.

Before you jump down my throat, I will tell you I was one of them.

We would desperately need our money and didn't care if they charged us $100 or whatever. PLUS they would roll the tax fee in too so we didn't have to come up with the cash for a preparer.

We knew damn well they were taking advantage of us, but when you're poor EVERYONE shits all over you, so you get used to it.

Thank goodness those days are over for me.

[hfojvt]

7. will I did figure that the interest

was "only" 67% which is not nearly as bad as a payday loan, but pretty outrageous considering that there is almost no risk involved in the transaction for the lender. But the IRS shorted me $200 on my refund and I still do not know why two weeks later. I think they only gave me credit for $3000 in IRA contributions because I used two banks for IRA accounts, and deposited the last $1000 in late January.

[SuperWonk]

8. Another one...

Taxpayer beware: Rapid refunds not as great as they sound

http://www.bdtonline.com/business/local_story_062140248.html?keyword=secondarystory

Let's put the word on the street about Household bank and other predators!

[politicat]

15. $3000 is the maximum you can take for IRA deductions.

Just so you know.

See Publication 17 from the IRS.

[Crazy Dave]

12. I never could understand why people wait a whole year....

...then can't wait an extra two weeks which has been the average for me when I route it into my bank account. Last year I think it only took 11 days.

[DS1]

13. Oh hell. I checked it out, it didn't take long at all to realize it was a

loan, and I did my taxes with Turbotax.

[SuperWonk]

14. Good call...

"Oh hell. I checked it out, it didn't take long at all to realize it was a loan, and I did my taxes with Turbotax."

That's the thing... the HSBCs of the world don't get rich off of full disclosure.
It is the poor and desperate that fall into these traps. And they don't know any better.