We all know that there are some crooked tax preparers out there. Heck there are crooked people in every profession. It seems like these bad preparers are giving refund anticipation checks a bad name for everyone. If you don’t know what they are, they are similar to a cash advance, so people who want their refund immediately can have access to the funds right away. Just like any cash advance system, there is a fee for this service.
The Consumer Financial Protection Bureau reports that it has received complaints that refund anticipation checks have sent the wrong messages in advertising. Regulators are concerned and think it’s time to step in to make sure that taxpayers are fully informed of the fees that are charged for this service. They are working now to finalize rules on prepaid debit cards to assure that the terms and disclosures are easy to read.
According to earnings reports, refund anticipation checks and prepaid debit cards make up 10% of H&R Block’s revenue charging fees between $34.95 – $59.95 for this service. Liberty Tax Service gets over 20% in revenue for charging fees as well. Wow, that is quite a bit!
We hate the fact that refund anticipation checks are getting a bad rap all around! They can be a great asset for people who need them as long as they are fully aware of the fees included beforehand. If it means getting their cash a few weeks earlier and not having to pay reconnection fees or overdraft fees, it could be more than worth it to pay the fees in comparison. The Christmas season can get expensive and put some a little behind, throw in an unexpected bill or financial emergency and things can get rough quickly. We hope refund anticipation checks are here to stay!